Hong Kong Efficiency Unit

Public Private Partnerships (PPPs) are arrangements where the public and private sectors both bring their complementary skills to a project, with varying levels of involvement and responsibility, for the purpose of providing public services or projects. They are characterised by the following:

• Large scale expensive long-term projects usually involving the construction of a new facility designed to deliver particular services;
• The Government defines the quality and quantity of services, and the timeframe in which they are to be delivered;
• The private sector is responsible for delivering the defined service while the government is mainly involved in regulation and procurement;
• A long term relationship is established, typically between 10 years and 30 years, depending on the nature of the facilities, assets or services to be delivered;
• Responsibilities and risks are allocated to the party best able to manage them;
• The private sector and/or the Government finances the project (wholly or in part). The private sector and/or the Government would recoup its investment from charges on end-users or payments made by the Government during the life of the contract;
• The private sector is encouraged to make use of its innovation and flexibility to deliver good quality, cost-effective services throughout the project lifecycle; and
• The different functions of design, construction, operation and maintenance are integrated / use a whole-of-life approach.