Private-sector involvement in public infrastructure is not new. Historically, toll roads, bridges, canals, schools, railways, hospitals, etc. were normally outside the public sector. What PPPs are complementing, or replacing, is a system of ownership and operation which largely developed in the nineteenth and twentieth centuries.
The current developments in PPPs have been driven by a general move to the application of market disciplines and the involvement of the private sector. The growth of the PPP can therefore be seen as a parallel process to privatisation and outsourcing; lying somewhere between the two. At the policy level, this move has had widespread political backing. However, it can also be argued that the growth of PPPs is due to a growing gap between investment needs and available public resources. There are two dimensions to be considered: "quality", that what is delivered is better, and "volume", that more can be delivered earlier. The first of these is obviously a desirable attribute for all investments. The second is less certain. Gaining economic benefit early is desirable, but only if later projects with greater through-life benefits are not displaced.
It is difficult to describe a typical PPP, because they are so diverse. However, as an introduction to the vocabulary - to be extended in §2.4 - a PPP is a long-term contract between a public-sector Promoter and a private-sector Provider. Under this contract, the Provider will typically arrange the funding for the project, build the asset that the Promoter has specified, operate and maintain it, and hand it over in good working condition to the Promoter at the end of the contract. In return, the Provider will receive either direct payments from the end-users or be paid to provide the service by the Promoter.