In Chapter 1.1, we described four possible approaches a state might choose when looking to involve private-sector parties and private finance:
• Partnership: A contractual approach where both the public and private parties have a shared interest in the risks and benefits of a project.
• Concession: A contractual approach where a public party, usually the state, gives a third party the right to use land or property for a specific purpose and for a specific period.
• License: A license is awarded where a party, usually the state, gives a third party the right to own or use something.
• Privatization: The transfer of assets and/or operations from the public sector to private ownership and management.
There may be many underlying variations to each of these elements-especially the approaches to partnerships and concessions.
The range of contractual approaches to infrastructure can appear to be a complete alphabet soup of acronyms. It is helpful to decipher how to group these acronyms into the four main approaches we have identified, and then how to translate the acronyms to understand the precise contractual approach being described. Figure 1 allocates the most commonly found acronyms to the four types of contracts.
Having sorted the acronyms into the types of the approach into which they fall, we need to decode them. In Figure 2 are the rules for decoding infrastructure project acronyms.
These acronyms can then be translated according to the different activities or roles for each sector during the construction or development phase (Table 1) and operational phase (Table 2).