PPPs can be of different types, for example, an investment based PPP, or one where only private partner's efficiency is utilised or one which has mere private partner's involvement in a specified task. The first example would be of a BOT framework (discussed later in this module) where the public entity transfers the right to design, finance, construct, operate and maintain an asset to the private partner while retaining the asset ownership with it. The diagram above describes the modality of a BOT framework. The other type of PPP arrangement which involves utilisation of private sector efficiency is the management contract (discussed later in the module) where only the O&M risk is transferred to the private partner by the public entity. The public entity banks on the operational efficiencies of the private partner. Both the above referred cases satisfy all the essential elements of PPP where an outsourcing contract for only services would not satisfy all the essentials of a PPP.
Based on the definition of PPPs by the Department of Economic Affairs, Government of India; the essential conditions that define PPPs are as follows: