What is a P3?

A Public-Private Partnership (P3) is a delivery method that offers best value to the taxpayer through risk transfer. It’s a contractual agreement between a public agency and a private entity that allows for greater private sector participation in the life cycle performance of the asset. Generally, a P3 is considered to include long-term capital and financing as part of a Design-Build-Finance-Operate-Maintain (DBFOM) contract structure or a monetization transaction.

A P3 is:

A DESIGN AND CONTRUCTION, FINANCING, OPERATIONS AND MAINTENANCE PARTNERSHIP – the public sector enters into a long-term contract with the private sector to deliver assets and services for the benefit of the general public
A RISK SHARING APPROACH – the private sector assumes key financial, technical and operational risks, while the public sector sets policy and retains ownership
A LIFECYCLE PROCUREMENT APPROACH THAT GUARANTEES PERFORMANCE – by integrating design, construction, and financing with operations and maintenance, the asset performance is optimized for the long term
A TRANSPARENT RELATIONSHIP – the owner creates the control parameters during procurement and retains ownership of the project.

A P3 is not:

PRIVATIZATION – the public sector retains ownership and ultimate control of the public asset
A SHORT-TERM CONTRACT – the private entity enters into a performance-based contract with financial penalties imposed by the public agency if availability and quality standards are not met
A FUNDING SOLUTION – the government agency gains access to private financing options which may not be available in regular public procurement, but the project must still be creditworthy
THE RIGHT SOLUTION FOR EVERY PROJECT- a value-for-money analysis should be performed by experienced legal, technical and financial advisors to determine if a P3 approach is right for the project.

A P3 is:

A P3 is not:

Sign In

Lost Password