Public-Private Partnerships PPPs combine skills and resources of both public and private sectors through sharing of risks and responsibilities. Private sector usually incorporates its expertise and knowledge in order to develop, build and improve public infrastructure as well as operate and maintain public services.
PPPs can take a wide range of schemes and modalities depending on private entity degree of involvement in traditionally public infrastructure. If the private sector designs, builds, owns, develops, operates and manages an asset with no obligation to transfer ownership to the government, schemes such as Build-own-operate (BOO) or Build-develop-operate (BDO) are under consideration. If the private sector designs and builds an asset, operates it, and then transfers it to the government when the operating contract ends, a Build-own-operate-transfer (BOOT) scheme is then put in place.
Across APEC countries, units have been created by governments in order to support management and development of PPP projects development. Some of the most representative units of countries on which development of infrastructure is key are PPP Canada, Infrastructure Australia, PPP Center in the Philippines, Infrastructure Australia, Proinversion PPP Agency in Peru, and Ministry of Public Works-Concessions in Chile.
Indonesia holds a particular structure on which the Bappenas Directorate of Public Private Partnership has the task of carrying out the preparation of policy formulation as well as the implementation and plan preparation of national development concerning cooperation between the government and the private sector, while Indonesia Infrastructure Guarantee Fund-IIGF in the other hand acts as the Guarantee Provider to the private sector for various infrastructure risks.
Similar to Indonesia, Mexico set up an agency to manage the development of national infrastructure via public-private partnerships (PPPs) Mexico’s National Infrastructure Fund – Fonadin and by now Fonadin is the most important conduit for PPPs in Mexico focusing not only on infrastructure related matters such as highways, ports, airports, but also on broader issues such as environment, urban mass transportation, water and tourism.
The majority of the countries have benefit from PPP schemes, as for example Proinversion APP agency in Peru reporting that between July 2011 and December 2013, projects for an investment amount of about USD 5.2 billion have been awarded, and Philippines PPP Center stating that as of July 2014, USD 1.43 billion have reached awarded contract status. Fonadin in Mexico so far has authorized more than USD 7.924 billion for studies and projects, which they expect will foster investments for over USD $17.553 billion.
While each country has its own legal framework in order to adjust the best to each countries policies and requirements, supranational organizations are also support in planning and structuring infrastructure projects involving a public-private partnership. The Public-Private Partnership in Infrastructure Resource Center for Contracts of the World Bank PPPIRC provides for example legal materials which can assist in the planning, design and legal structuring of any infrastructure project.