B. MODELS OF PPP

A wide spectrum of PPP models has emerged. These models vary mainly by:

• Ownership of capital assets;

• Responsibility for investment;

• Assumption of risks; and

• Duration of contract.

• The PPP models can be classified into five broad categories in order of generally (but not always) increased involvement and assumption of risks by the private sector. The five broad categories are:

• Supply and management contracts

• Turnkey contracts

• Affermage/Lease

• Concessions

• Private Finance Initiative (PFI) and Private ownership.

The basic features of these five categories of PPP models are shown in figure 1.

Figure 1. Basic features of PPP models

Each of these five categories has many variants. A categorization of the PPP/PSP models together with their main characteristics is shown in table 1³. While the spectrum of models shown in the table are possible as individual options, combinations are also possible such as, a lease or (partial) privatization contract for existing facilities which incorporates provisions for expansion through Build-Operate-Transfer. In fact, many PPP projects of recent times are of combination type.

Table 1. Classification of PPP models

sThe main features of each of the broad categories of the PPP models are discussed next.

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3 The use of various categorization terms in the table, and arrangements that go by these terms do not always have the same features as set out in the table or mentioned in the discussion afterwards.