A common rationale for involving the private sector in infrastructure provision is that the private sector is more efficient and effective at managing infrastructure construction projects, and at managing service delivery once the assets are in place.
The quality of infrastructure service delivery by government entities is often constrained by limited capacity and weak management incentives. This increases the cost of infrastructure-for example, the World Bank's Africa infrastructure diagnostic study [#106, pages 71-74] estimates that inefficiencies in state-owned utilities and infrastructure providers in Sub-Saharan Africa cost around US$6 billion a year. It also reduces the benefits users get from the service.
Studies comparing PPPs and publicly-procured or run infrastructure have found that PPPs can achieve better results in both construction of new infrastructure assets, and in infrastructure service delivery, as described in turn below. Still, achieving these benefits, and ensuring they translate into lower infrastructure costs for taxpayers and users, depends on the government structuring, procuring, and implementing the PPP effectively; and could be undermined where weak government or private sector capacity results in poorly-run tender processes or poorly drafted contracts, and frequent re-negotiation, as also described below.