FAQs on Public Private Partnership
What is Public Private Partnership?
Public Private Partnership is a form of contract where a private sector company finances, plans, designs, executes, runs and maintains public buildings or facilities. The public party commissions a building or facility and rents it from the partnering private sector company.
Who is involved in a Public Private Partnership?
Besides the public party which commissions the building, there are generally three professional partners for financing, executing and operating the building or facility: the financial partner, the contractor and the operating company.
Is a Public Private Partnership less expensive?
Many years of experience from the UK, the Netherlands and Iceland have shown savings of 10-20%. The more comprehensive the operating agreement, the greater the savings.
Does Public Private Partnership mean a better building or facility?
Regardless of whether savings are realised, the quality will be higher because all parties sit at the same table to safeguard common interests such as economics, energy consumption, durability of materials and maintenance for several decades.
What does a Public Private Partnership building look like?
It could be an architectural gem or a more prosaic building. The process has been described as a "calculator" where the objective criteria carry most weight for the benefit of all.
How does one get started with a Public Private Partnership?
It requires an appraisal of the suitability of the project and thus takes more time for preparation than it otherwise would. Moreover, it is an advantage to seek competent advice regarding the process of a Public Private Partnership, and especially the legal aspects, the payment mechanism, and the contents of the agreement.
How long does one typically work together on a Public Private Partnership?
Public Private Partnership contracts typically run for 20-30 years, after which the building or facility is handed over to the public party for an agreed amount, and in a predefined condition.
Why aren't Public Private Partnerships more widely adopted?
In contrast to overseas countries, it is only major projects worth at least DKK 100 million that are suited for Public Private Partnership in Denmark. Moreover, municipalities are restricted by rules in utilising Public Private Partnerships, despite it being obvious to use Public Private Partnerships at a time when budgets are being tightened.