"A contractual agreement between a public agency and a private sector entity. Through this agreement, the skills and assets of each sector are shared in delivering a service or facility for the use of the general public."
Typical Example
FAAN & Bi-Courtney (MMA2 Terminal)
Attract private expertise and investment to supplement scarce public resources.
Use available resources for infrastructure and service delivery more effectively.
Reallocate roles, incentives, and improve accountability in public service.
Distinguished by risk allocation, investment levels, and contract duration.
Public sector hires private entity for specific tasks. Government pays a predetermined fee. Public sector remains primary provider.
Daily management assigned to private partner. Partner paid rate + performance incentives. Public sector retains capital investment obligation.
Private sector operates service at its own risk/expense. Responsible for losses and debts. Public sector handles new investments.
Private concessionaire responsible for full delivery: operation, maintenance, management, and capital investments. Assets owned by public sector but operated by private.
Specialized concession for new infrastructure. Private sector finances and builds. Recovers cost through user charges over contract life.
The four critical stages of transaction.
Cost, risks, and quality assessment.
Consultation with end-users.
World-class governance standards.
Allocated to the party best able to manage.
Verifiable service standards.
Remove barriers to entry.
Focus shifts to developing bankable projects.
Goes beyond asset creation to include Operation & Maintenance.
Time-bound projects integrated under a unified plan.