Part 1 practice

Question 1

the government hires a private company or entity to carry out one or more specified tasks or services for a period

Answer 1

Service Contracts

Question 2

the government pays the private partner a predetermined fee for the service, which may be based on a one-time fee, unit cost, or other basis

Answer 2

Service Contracts

Question 3

Duration of contract is typically __ years, may be renewed up to __ years

Answer 3

10 & 20
Lease contract

Question 3

expands the services to be contracted out to include some or all of the management and operation of the public service

Answer 3

Management Contracts

Question 4

the private partner is responsible for the service in its entirety and undertakes obligations relating to quality and service standards.

Answer 4

Lease Contracts

Question 5

do not involve any sale of assets to the private sector.

Answer 5

Leases

Question 6

the private partner provides the capital required to build the new facility.

Answer 6

Build-operate-transfer

Question 7

kind of specialized concession in which a private firm or consortium finances and develops a new infrastructure project or a major component according to performance standards set by the government.

Answer 7

Build–Operate–Transfer and Similar Arrangements

Question 8

where the developer constructs and operates the facility without transferring ownership to the public sector.

Answer 8

Build–own–operate (BOO)

Question 8

where the transfer to the public owner takes place at the conclusion of construction rather than the end of the contract.

Answer 8

Build–transfer–operate (BTO)

Question 9

contract, ownership is never in private hands. Instead, a single contract is put out for the design, construction, and operation of the infrastructure project.

Answer 9

Design–build–operate (DBO)

Question 10

The public sector is responsible for establishing performance standards and ensuring that the concessionaire meets them.

Answer 10

Concessions

Question 11

approach, the responsibilities
for designing, building, financing, and operating are bundled together and transferred to private sector partners

Answer 11

Design–build–finance–operate (DBFO)

Question 12

The public sector is responsible for establishing performance standards and ensuring that the concessionaire meets them.

Answer 12

Concessions

Question 13

The public sector’s role shifts from being the service provider to regulating the price and quality of service.

Answer 13

Concessions

Question 13

A concession contract is typically valid for __-__ years so that the operator has sufficient time to recover the capital invested and earn an appropriate return over the life of the concession.

Answer 13

25–30years
Concessions

Question 14

The concessionaire is responsible for any capital investments required to build, upgrade, or expand the system, and for financing those investments out of its resources and from the tariffs paid by the system users.

Answer 14

Concessions