Question

What are the strengths and weaknesses of a public-private partnership (P3) in relation to infrastructure development?

Answer 1

Strengths of a public-private partnership in relation to infrastructure development:

a) Public-private partnership can deliver better infrastructure related solutions as compared to public or private entity separately.

b) Public-Private partnership ensures faster delivery of project and gives importance to time and performance.

c) Risks are analyzed on time to determine whether the project is suitable to work or not.

d) Public-private partnership allows government funds to be diverted to some other socio-economic areas.

e) In relation to infrastructure development, public-private partnership give importance to quality and budget throughout the life cycle of the project.

Weaknesses:

a) Public-private partnership bears certain risks for the private participant, who expects that he should be paid separately for taking those risks. This can increase the cost burden for the government.

b) In public-private partnership delivery of projects could be more expensive.

c) Its project agreements continue for a long period of time, also complicated because of the impossibility of verification of all particular events that would affect the future activities.