Module 3 – Government involvement in PPPs

The government has an important stake in infrastructure development. Considering its public good in nature, strategic importance, profound effects on other sectors, and related issues in public safety and security, and utilization of natural resources, governments always take interest in infrastructure development, whether implemented by the public sector or the private sector.

There are also other reasons of government's interest which include:

  • The network nature of most infrastructures implies that they cannot be considered as isolated projects (road, energy transmission line, telephone line, etc.)
  • Can be used as a policy tool for development
  • Infrastructure is important and needed but individual projects are not always commercially viable (water supply, rural/local roads, for example)
  • Bulky nature and large size of investment requirements
  • Long to very long existence with perpetual liability through generations (external costs, for example).

This Module examines more narrowly major considerations for government involvement in the context of PPPs and not in relation to many of the reasons mentioned above.

IDevice Icon Objectives of Module 3
Upon completing this module, you should be able to understand:
  • the key responsibilities of government in the policy area
  • different types of direct and indirect fiscal liabilities incurred by governments due to PPPs
  • methods for assessing tehe viability of PPP projects, such as Public Sector Comparator (PSC)
  • social issues and pro-poor PPPs
  • types of government support for PPPs
  • capacity building needs for public officials

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