2.9  Advantages of successful PPP

1.  Distributing risks; the State (Federal Entities) shall not bear all project risks, as is the case in the traditional procurement contracts.

2.  Ensuring the quick implementation of the project within the agreed time and cost, since transferring design and construction responsibility to the private sector and linking payments to service provision stimulate the private sector to quickly complete the projects.

3.  Improving the service quality, the global experiences prove that the quality of service in the partnership projects is better than such service quality in the traditional outsourcing. This may reflect the impact of several factors, including the existence of incentives and penalties in the contract, the productivity of workers in the private sector, and introduction of innovations in the service provision.

4.  Monitoring the operating expenses with investment expenses in the budget. This secures the financing required for periodic maintenance of the traditional projects.

5.  Avoiding the waiting of financing availability for numerous projects that the State may desire to implement. The partnership opens the door for launching projects, even in the lack of money for investment expenses. Thus, the urgent projects shall not be delayed.

6.  Promoting the decentralization, the partnership shall allow activating the economic decentralization as the Federal Entities will be able to develop and implement developmental and strategic projects through the partnership with the private sector. The Federal Entities may not have competences and experience or adequate financing to develop such projects alone.