Rationale and Approaches

Well-designed arrangements for private participation or public private partnerships (PPPs) allow commercial discipline to be introduced in the delivery of infrastructure services, thereby improving efficiency and lowering costs.  Governments have adopted a variety of private participation in infrastructure (PPI) approaches to engage the private sector in the delivery of such services, ranging from basic service contracts to concessions and asset sales. This range reflects a continuum of increasing allocation of risk to the private sector.

The main distinction among the key PPI approaches is how responsibility is allocated for asset ownership, operations and maintenance, capital investments, and commercial risk, as summarized in the table below.