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PPP Introduction and Overview

15. When to Use PPPs: Motivations and Caveats

There are a variety of reasons commonly given for using PPPs as an option to procure infrastructure. These reasons may be classified according to three main groups:

  • Those related to the financial nature of PPPs, or PPPs as a financial mechanism for governments (including the “off balance sheet” motivation);
  • Those related to project efficiency and effectiveness; and
  • Others related to overall efficiency for governments (including fostering transparency and controlling corruption) [33].

This section describes and explains the rationale behind these groups (5.1. to 5.3.).

It also describes the main disadvantages of PPPs that limit or qualify the usefulness of the tool (section 5.4), and it supplies a number of recommendations for the better use of PPPs (section 5.5).

Finally, section 5.6 provides some reflections for the specific context of least-developed countries and the challenges that they face when deciding to promote the PPP route as a means to boost infrastructure development.

 

 

 

[33] Another category of reasons that is not developed in this chapter is “ideological motivations”, for example, when a government pursues a “small government” policy.

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