Public-Private Partnership Pros & Cons Benefits and Disadvantages of PPP Contracts thumbnail
Public-Private Partnership Pros & Cons Benefits and Disadvantages of PPP Contracts
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A public-private partnership's return on investment, or ROI, might be greater than projects with traditional, all-private or all-government fulfillment. Innovative design and financing approaches become available when the two entities work together. Risks are fully appraised early on to determine pr
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  • A public-private partnership's return on investment, or ROI, might be greater than projects with traditional, all-private or all-government fulfillment. Innovative design and financing approaches become available when the two entities work together.
  • Risks are fully appraised early on to determine project feasibility. In this sense, the private partner can serve as a check against unrealistic government promises or expectations.
  • The operational and project execution risks are transferred from the government to the private participant, which usually has more experience in cost containment.
  • High-quality standards are better obtained and maintained throughout the life cycle of the project.
  • Every public-private partnership involves risks for the private participant, who reasonably expects to be compensated for accepting those risks. This can increase government costs. When there are only a limited number of private entities that have the capability to complete a project, such as with the development of a jet fighter, the limited numbe...

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