There has always been a debate on whether the public sector companies or the private sector firms contribute to the real growth of a country. While some analysts are in favor of the public sector, others think that achieving the growth targets is impossible without private participation. Recent history shows that whenever there is a partnership between public sector undertakings and the private companies, the results have been phenomenal and have benefited the common man greatly. Before we move on to the advantages of such partnerships, let us know more about the concept of Public Private Partnership (PPP) in detail.

The PPP Model

As mentioned above, the public private partnership model can work wonders if implemented well. As per the agreement between the government controlled and privately run organizations, both entities agree to work closely and provide research and technical support for completing the projects on time. Many times, to complete the project in the set deadlines, a special purpose vehicle is floated in which both the entities have their share. The rules of the agreement are binding on both of them and hence there is more efficiency and discipline in the way of functioning. There are various types of public private partnership and the initiative for such partnership is taken by the government authorities. The government authorities select the private firm which will be the partner of public firm after considering the track record of the private firm in successfully delivering projects on time and maintaining high quality standards. Read the rest of this entry »