Question

Pro and con on private public partnership? Provide website or reference to the answer

Answer 1

Public private partnership - A public private partnership is a contract signed between a private group and organization, usually a corporation and a government entity. The contract stipulates the terms by which both parties will work together in order to achieve something which benefits the public. This benefit can come in the form of an asset, for example a sports stadium which will draw in lots of revenue, or a service, such as a new library or hospital.

Pros - By spreading the risk of an investment between private entities and public bodies, the public private partnership is able to produce infrastructure solutions which otherwise would not be viable for either party individually. When they are encouraged to work together they are often willing to share the risk of participating in such ventures.

Cons -There are also some drawbacks to the public private partnership model. For one thing, because the risk level is often higher for the private firm, they expect to be compensated appropriately. This is natural of course, but it means that the projects are often expensive for governments to pursue and allocate public funds to. When the private firm does not perform as expected, while it will often be penalized contractually, costs can rapidly spiral for the government body. When public private partnerships have gone wrong they have often been very expensive for the taxpayer.

http://www.bmmagazine.co.uk/in-business/public-private-partnerships-pros-cons/