1.1.1 Public Private Partnership (PPP) is a form of procurement introduced in 2004 under the Best Sourcing framework. Best Sourcing encourages public agencies to engage private sector providers in delivering non-core government services if it is more efficient to do so. Public agencies can engage the private sector in many ways, such as contracting for manpower, service outsourcing or Business Process Outsourcing. Public Private Partnership (PPP) is another form of Best Sourcing that can be used to work with private sector to deliver services, particularly services that require the development of new physical assets.
1.1.2 PPP refers to long-term partnering relationships between the public and private sector to deliver services. It is an approach that Government has adopted to increase private sector involvement in the delivery of public services.
1.1.3 Conventionally, public agencies have only engaged the private sector to construct facilities or supply equipment. Public agencies will then own and operate the facilities or equipment to deliver services. For example, a public agency might engage private companies to build a water treatment plant. Upon completion, the public agency will own and operate the water treatment plant to provide water to the public.
1.1.4 With PPP, the public sector will focus on acquiring services at the most cost-effective basis, rather than directly owning and operating assets. For example, if PPP is used to develop a water treatment plant, the private sector will be engaged to not only construct the plant, but also to design, operate, maintain and secure financing to build the plant to supply water to the public agency. Hence, instead of owning and operating the water treatment plant, the public agency purchases the water directly from the private sector. This means that the private sector has more room to introduce innovation into the delivery of public sector services.
1.1.5 Under PPP, the private sector can look forward to providing a wider range of services and over a longer contract period (usually between 15 to 30 years). Through closer collaboration with the private sector, public services can be delivered in a more value for money way by making optimal use of the public and private sectors' expertise, resources and innovation to meet public needs effectively and efficiently.