A strong focus is on service delivery by the private partner and compliance to pre-determined as well as measurable standards that are specified by the public entity.
It is to be remembered, that only those arrangements between public entity and private partner which satisfy all the above essential conditions are termed as PPPs. It is not necessary that the private partner be engaged for delivering the complete end-to-end chain of activities in a sovereign function, but could be limited to select components.
| Performance Linked Payments in Management of Municipal Solid Waste For instance, in a municipal solid waste management project where the private partner is engaged only to collect and dump the waste, the onus of maintaining a clean city is not transferred to the private partner. The public entity bears the majority risk pertaining to performance, payments to the private partner are linked to the number of trips conducted and the amount of waste dumped but may not be linked to cleanliness of the city. But when a project involves integrated management of municipal solid waste, there is substantial risk sharing between the public and the private partner. The private partner is made responsible for a clean city as well as for effective and efficient management of municipal solid waste. The payments made to the private partner are also linked to performance. |