A public-private partnership (PPP) is conceptualised as a contractual agreement between the public sector (government departments or public agencies) and one or more private sector partners for the purpose of supporting the delivery to the public sector of services like financing, designing, building, operating and/or maintaining a certain project. It embraces a range of structures and concepts, which involve the allocation of risks and responsibilities between the public and private sectors. The literature recognises and credits the UK as the birthplace of PPPs and related funding mechanisms.
The most common and original form of PPP used in the UK, the Private Finance Initiative (PFI), was introduced in 1992 to involve the private sector in the design, construction, financing, operation and maintenance of public infrastructure, and to secure the delivery of well-constructed, well-maintained infrastructure at a good value for taxpayers. Like the UK, Australia and New Zealand have long histories of using PPPs for public infrastructure projects, and that usage is likely to continue. In both countries, the development of centralised PPP agencies to develop standardised agreements, and to shepherd and oversee the use and implementation of the PPP model seems to be one of the key factors that have contributed to the success of the model, or at least to have lessened the number of severe failures.
The use of PPPs in Australia and New Zealand has evolved considerably over the past 25 years and is now used to deliver services across a very wide range of economic (for example, roads, rail, airport infrastructure) and social (for example, schools, hospitals and prisons) sectors. The Australian and New Zealand market has now established a reputation for having a clear and transparent PPP procurement process.