Joint ventures are projects to which both the public and private sectors contribute, but where the private sector has overall control. In many cases, the public sector contribution is made to secure wider social benefits, such as road decongestion resulting from an estuarial crossing. In other cases Government may benefit through obtaining services not available within the time scale required. The project as a whole must make economic sense and competing uses of the resources must be considered. The main requirements for joint venture projects are:
• private sector partners in a joint venture should be chosen through competition;
• control of the joint venture should rest with the private sector;
• the Government's contribution should be clearly defined and limited. After taking this into account, costs will need to be recouped from users or customers; and
• the allocation of risk and reward will need to be clearly defined and agreed in advance, with private sector returns genuinely subject to risk.
The Government's contribution can take a number of forms, such as concessionary loans, equity, transfer of existing assets, ancillary or associated works, or some combination of these. If there is a Government equity stake, it will not be a controlling one. The Government may also contribute in terms of initial planning regulations or straight grant-subsidies.