Role Of Public Private Partnership Projects Essay

1637 Words Mar 28th, 2016 7 Pages
PFI / PPP
PFI (Private Finance Initiative) is a procurement method where the private sector companies design, finance, build and operate infrastructure and provide long term facilities management such as road/rail infrastructure networks, hospital, prison or school through long term concession agreements with the public sector.(government)
Public-Private Partnership (P3) is a contractual arrangement between a public agency (federal, state or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public.
When undertaking a PPP, a public authority carries out a competitive procurement process, with a number of private agency bidding against each other on the basis of price and quality to undertake the project. Each will involves a mix of investors, such as construction and facilities management companies and private equity institutions.
Private Finance Initiative/Public-Private Partnership Projects (PFI/PPP) is designed specifically for large-scale, high value projects which shift towards privatisation. This type of contracts demand special financial and managerial requirements add significant complexity to relationships between the concerned parties, negotiation, arrangements, agreements, and long-term engagement. Small and medium contractors are not capable of dealing with the complexity and size of PFI projects.
PFI use private finance and…

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