2.2.1. Basic features of PPP models

The basic features of these five broad categories of PPP models are shown in the next figure. Each model has its own pros and cons and can be suitable to achieve some of the objectives of private participation. Special characteristics of some sectors and their technological development, legal and regulatory regimes, and public and political perception about the services in a sector may also be factors in deciding the suitability of a particular form of private participation. For example, management contracts are common for existing assets in the water and transport sectors, affermage/lease is common in the transport sector, concessions are common in the transport and telecommunication sectors, and turnkey and private ownership of assets are common in the power sector.

Figure 3: Basic features of PPP models.

A categorization of the PPP/PSP models is shown in the next table. While the spectrum of models shown in the table are possible as individual options, combinations are also possible. For example, a lease or (partial) privatization contract for existing facilities could incorporate provisions for expansion through Build-Operate-Transfer (BOT). In fact, many contracts of recent times are of combination type.

Table: Classification of PPP/PSP models and typical characteristics. In practise, many variations and combinations thereof exist.

IDevice Icon Examples of PPP projects

Examples of PPP projects of the combination type include The Shanghai Container Terminal Company Limited (between the Port Authority and Hutchinson Whampoa in Shanghai, China), International Container Terminal Services, Inc. (in Manila, Philippines), and Delhi International Airport Limited (under an Operation-Maintenance-Development Agreement between GMR-Fraport Consortium and Airports Authority of India in New Delhi, India). These long-term lease/concession combination contracts involve operation and management and significant investments in existing public assets.

The Port Klang Container terminal deal in Malaysia is also an example of the combination type of PPP that involved leasing of existing infrastructure facilities at the port and Build-Rehabilitate-Operate-Transfer (BROT) for further infrastructure development. The terminal facility was located on land that could not be legally sold to any private company. In order to circumvent this problem, the Port Authority leased the land to the private company for 21 years for the express purpose of operating a container terminal.

Copyright © 2008 by Transport Policy and Development Section, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).