Defense

PPP projects in the defense sector include equipment maintenance and installation, supply chain integration and operational support, depot maintenance, specialized military training and real estate management (land development, privatized housing and base closures and development). The projects typically are designed to overcome fiscal constraints, manage life-cycle costs, and reduce pressure on military personnel.

The UK Ministry of Defense has employed various PPP models for more than 56 defense projects-everything from building military accommodations to training personnel to putting up satellites. Total value: £4.65 billion.60 The German defense ministry has likewise initiated a number of innovative defense PPPs. An Army maintenance joint venture with HIL GmbH involves the entire value chain for 10,000 combat systems (not including system purchase). Under the terms of the eight-year contract, HIL GmbH must ensure that 70 percent of all combat systems are available for use at all times.61

Meanwhile, in the United States, the bulk of defense PPPs have involved either military base closures or military housing redevelopment and privatization. The Army's Hawaii Family Housing project, a joint venture between the Army and Actus Lend Lease, involves building 7,894 military housing units at seven Army installations on Oahu. The 50-year lease provides for $1.6 billion in housing delivered by the private sector partner over a 10-year period.