7. Public Provate Patnerships Flashcards
What is a Public-Private Partnership (PPP)?
A PPP is a collaboration between the public sector and private companies to finance, develop, and manage infrastructure projects or services.
(Lesson 7, p.1)
What are the key features of PPPs in project financing?
- Risk Sharing, 2. Long-term Contracts, 3. Revenue Models, 4. Financing Structure, 5. Performance-Based Metrics.
(Lesson 7, p.1)
How do PPPs manage risk allocation?
Risks are allocated to the party best suited to handle them, such as construction, financial, regulatory, or operational risks.
(Lesson 7, p.1)
What are the different revenue models in PPPs?
- User Fees, 2. Availability Payments, 3. Shadow Tolls.
(Lesson 7, p.1)
How is financing structured in PPPs?
A mix of equity and debt financing, often involving private investment, bank loans, bonds, or multilateral funding.
(Lesson 7, p.1)
What are the advantages of PPPs in project financing?
- Access to Private Capital, 2. Improved Efficiency, 3. Risk Sharing, 4. Cost Savings, 5. Enhanced Service Quality, 6. Faster Project Completion.
(Lesson 7, p.2)
How do PPPs improve efficiency and innovation?
Private sector expertise brings advanced technology, better management practices, and cost reduction strategies.
(Lesson 7, p.2)
What are the economic benefits of PPPs?
- Job Creation, 2. Economic Growth, 3. Increased Budget Flexibility for Governments.
(Lesson 7, p.2)
How do PPPs ensure accountability and service quality?
Performance-based contracts include KPIs and financial penalties for non-compliance.
(Lesson 7, p.2)
What are the challenges of PPPs in project financing?
- Complex Contract Negotiations, 2. Imbalanced Risk Allocation, 3. High Cost of Capital, 4. Public Backlash, 5. Long-Term Fiscal Commitments.
(Lesson 7, p.3)
What are common public concerns about PPPs?
Concerns over user fees, private control of public assets, and potential service quality issues.
(Lesson 7, p.3)
Why do PPPs sometimes have higher costs than traditional financing?
Private financing often comes with higher interest rates, increasing long-term project costs.
(Lesson 7, p.3)
What are the different types of PPP contracts?
- BOT, 2. BOO, 3. DBFO, 4. BLT, 5. LDO, 6. Concession, 7. O&M, 8. DB, 9. Joint Ventures.
(Lesson 7, p.4)
What is a Build-Operate-Transfer (BOT) contract?
The private sector designs, finances, builds, and operates the project before transferring it to the government.
(Lesson 7, p.4)
What is a Build-Own-Operate (BOO) contract?
The private partner builds, owns, and operates the project indefinitely without transferring ownership.
(Lesson 7, p.4)
What is a Design-Build-Finance-Operate (DBFO) contract?
The private partner handles design, construction, financing, and operation, while the government sets standards.
(Lesson 7, p.4)
What is a Build-Lease-Transfer (BLT) contract?
The private partner builds the project, leases it to the government, and later transfers ownership.
(Lesson 7, p.4)
What is a Lease-Develop-Operate (LDO) contract?
A private firm leases an existing public asset, develops it, and operates it for a specific period.
(Lesson 7, p.4)
What is a Concession contract in PPPs?
The government grants the private sector the right to operate and invest in an asset while collecting revenue.
(Lesson 7, p.4)
What is an Operation and Maintenance (O&M) contract?
A private entity takes over management and maintenance of a public asset without financing responsibilities.
(Lesson 7, p.4)
What is a Design-Build (DB) contract?
The private sector designs and constructs the project, while the government handles financing and operations.
(Lesson 7, p.4)
What is a Joint Venture in PPPs?
The government and private sector co-invest and co-manage a project, sharing risks and profits.
(Lesson 7, p.4)
Why is a well-structured PPP contract important?
To clearly define responsibilities, risk allocation, performance expectations, and financial terms.
(Lesson 7, p.4)
What factors determine the success of a PPP project?
- Clear risk allocation, 2. Strong legal framework, 3. Transparent bidding process, 4. Performance monitoring.
(Lesson 7, p.4)
