Governments in most developing countries face the challenge to meet the growing demand for new and better infrastructure services. As available funding from the traditional sources and capacity in the public sector to implement many projects at one time remain limited, governments have found that partnership with the private sector is an attractive alternative to increase and improve the supply of infrastructure services.
The partners in a PPP' usually through a legally binding contract or some other mechanism, agree to share responsibilities related to implementation and/or operation and management of an infrastructure project. This collaboration or partnership is built on the expertise of each partner that meets clearly defined public needs through the appropriate allocation of1:
• Resources
• Risks
• Responsibilities, and
• Rewards
It is important to emphasize here that a PPP is not a solution option to an infrastructure service problem but it is a viable project implementation mechanism for a preferred solution option.
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1. Adapted from the definition of PPP provided by the Canadian Council for PPPs (see the Council's PPP definition at http://www.pppcouncil.ca/aboutPPP_definition.asp). Some other terms such as private sector participation (PSP) and private participation in infrastructure (PPI) are also used. These terms may not always have the same meaning, however.