4. PPP is used in the UK as a broad term that covers a number of different partnering arrangements between the public and private sectors. The most common of these arrangements are PFI contracts, which often involve the design, build, finance and operation (DBFO) of a particular asset - hospitals, prisons, schools, roads and bridges all fall into this category. Other PPP schemes (which might include headquarters buildings and, in the past, IT networks) might involve the grantor passing an existing asset to an operator, with the operator financing the refurbishment or other enhancement of the asset and then operating it - an example is the London Underground PPP.
5. Other types of PPP projects include:
• Joint Ventures - these are arrangements where the risks and rewards of a discreet project are shared between two parties, usually through a sharing of the economic ownership of a new body. Joint Ventures are rare within central government departments, but are more common in the health and education sectors, examples being the local improvement finance trust and local education partnerships; and
• financially free-standing projects (i.e., concessions), where the private sector undertakes the project on the basis that its investment will be recovered entirely through charges for the service(s) provided to the final user. This type of arrangement is relatively rare.
6. Typically, PFI contracts are let for periods less than the life of the asset, with the asset reverting, fully operational, to the grantor at little or no cost at the end of the contract.