A Public-Private Partnership (PPP) is a contractual arrangement between a public entity and a private sector party, with a clear agreement on shared objectives for the production of public infrastructure and services traditionally provided by the public sector. PPPs can have many different forms.

Required:
Explain the following types of Public-Private Partnership arrangements:
i) Operating and Maintenance Contract
(2.5 marks)

ii) Rehabilitate Operate and Transfer
(2.5 marks)

iii) Service Concession
(2.5 marks)

iv) Joint Venture
(2.5 marks)

i) Operating and Maintenance Contract
In this type of PPP arrangement, the public authority contracts with a private partner to operate and maintain a publicly owned facility or infrastructure. The private sector is partially involved, typically providing a service or managing the operation of the facility. Services or management contracts allow the private sector to provide infrastructure-related services for specified periods of time, ensuring the facility operates efficiently.

ii) Rehabilitate Operate and Transfer
Under this arrangement, the initial worn-out asset is provided by the public agency, and the private partner is required to invest in revamping the asset. The private partner is allowed to operate the rehabilitated asset for a specified period, during which they can recover their investment, and eventually, the residual asset is transferred back to the public sector or consolidated fund.

iii) Service Concession
Service concession arrangements involve contracts under which a public sector entity (the “grantor”) grants a private entity (the “operator”) the right to operate the grantor’s infrastructure (e.g., an airport, toll road, bridge, hospital, or power distribution). The infrastructure may already exist or may be constructed by the operator. The concession arrangement may also require significant upgrades to the infrastructure, with the operator allowed to recoup its investment over a specified contract period, after which the infrastructure is returned to the grantor.

iv) Joint Venture
A joint venture occurs when both the private and public sectors jointly finance, own, and operate a facility. In this arrangement, both parties share the risks and rewards associated with the venture, with clear agreements on the roles and responsibilities of each party.