Public-Private Partnerships
A Long Term Arrangement between Public and Private Sector
Public-Private Partnerships (often known as PPPs and P3s) refer to a joint venture/contract between government/statutory bodies and a private sector entity for the construction or maintenance of an infrastructure asset.
Public-Private Partnerships (PPP) Models
Operations and Maintenance (O&M) - Government/Statutory body enters into a contract to purchase an input/service from a private entity at predetermined charges/prices for a specified time.
Build Operate Transfer (BOT) - The private entity builds, operates, maintains, and then transfers the project to the government authority at the end of the contract period.
BOT Toll (User fee-based BOT) - The project cost is recovered through user charges (like Toll fee).
BOT Annuity - Government compensates the private entity by making periodic payments.
Build Own Operate (BOO) - Similar to BOT, but the private entity operates and retains its ownership.
Build Own Operate Transfer (BOOT) - Similar to BOT, but the private entity remains the owner while operating and finally transfers ownership to the government.
Build Own Operate Share And Transfer (BOOST) - Similar to BOOT, but the private entity transfers/ shares a part of the revenue with the government during the term.
Build Lease Transfer (BLT) - The private entity establishes a project, then transfers it to the government on lease for a fixed term.
Build Own Lease Transfer (BOLT) - Similar to BLT, at the end of the lease period, the facility's ownership is transferred to the government.
Build Transfer Lease (BTL) - The private entity establishes a project, transfers its ownership to the government then takes it back on lease for a fixed term.
Lease Develop Operate Transfer (LDOT) - A public asset is provided on rent to a private entity.
Toll-operate-transfer (TOT) - Projects which the government establishes are auctioned to private entities for operating and collecting tolls for a specified term.
Design-Build (DB) - The private entity designs and constructs the project according to government requirements, and in return, it takes a fixed amount as its charges.
Design-Build Finance (DBF) - Similar to DB, the capital cost involved in designing and construction is also met by the private entity.
Design-Build Finance Operate (DBFO) - Similar to DBF, but where the private entity operates till the operations revenue meets the cost incurred.
Design-Build Finance Maintain (DBFM) - Similar to DBFO, but where the private entity maintains the project till its lifetime. It is also termed as a management contract.
Design-Build Finance Maintain Operate (DBFMO) - Similar to DBFM, but where the private entity carries out the operations to generate revenue.
Design Construct Maintain Finance (DCMF) - The private entity understands the government specifications and accordingly designs, develops, upkeeps, invests, and then the facility is leased out to the government body itself.
Design-Build Finance Operate Transfer (DBFOT) - The private entity designs, builds, finances, operates, manages, and then transfers to the government at the end of the project life cycle.
This edition of econSHOT is proofread by Keerthana Venkatachalam . The thumbnail art is designed by Alana Biju.
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