Public-private partnerships offer several benefits which could be summarized as follow: 1-They provide better infrastructure solutions than an initiative that is wholly public or wholly private. Each participant does what it does best. 2- They result in faster project completions and reduced delays on infrastructure projects by including time-to-completion as a measure of performance and therefore of profit. 3- A public-private partnership’s return on investment, or ROI, might be greater than projects with traditional, all-private or all-government fulfillment. Innovative design and financing approaches become available when the two entities work together. 4- Risks are fully appraised early on to determine project feasibility. In this sense, the private partner can serve as a check against unrealistic government promises or expectations. 5- The operational and project execution risks are transferred from the government to the private participant, which usually has more experience in cost containment. 6- Public-private partnerships may include early completion bonuses that further increase efficiency. They can sometimes reduce change order costs as well. 7- By increasing the efficiency of the government’s investment, it allows government funds to be redirected to other important socioeconomic areas. 8- The greater efficiency of PPPs reduces government budgets and budget deficits. 9- High-quality standards are better obtained and maintained throughout the life cycle of the project. 10- Public-private partnerships that reduce costs potentially can lead to lower taxes. Why PPP is attractive to Governments. A)- PPPs has become attractive to governments as an off-budget mechanism for infrastructure development as: B)- They can enhance the supply of much-needed infrastructure funding. C)- They may not require any immediate cash spending, only Bank instrument SBLC/BG will generate the required funds for the projects. D)- They provide relief from the burden of the costs of design and construction. The PPP service provider arranges funds and project management and the governments do not have to pay any amount. E)- They allow the transfer of many project risks to the private sector. F)- They fulfill the promise of better project design, choice of technology, construction, operation, and service delivery. Advantages of PPP (1)- Facilitating creative and innovative approaches in stimulating private sector to engage in specific PPPs; with the government allowing bidders to compete based on their ability to develop unique and creative approaches to the delivery of the required output. (2)- Enhancing government’s capacity to develop integrated solutions that effectively address public needs. (3)- Reduced costs of implementation and realization of quality products and services attributable to economies of scale and operating efficiency. (4)- Accessing technical and managerial expertise, financial resources, and technology from the private sector. (5)-Facilitating large scale capital injections while reducing public debt and dependency on aid. (6)- Better responsiveness to consumer needs and satisfaction of those needs. (7)-Fostering economic growth by developing new investment opportunities and increasing provision of public goods and services. (8)-Ensuring fulfillment of the best interests of the public and private sector through an appropriate allocation of risks and returns. PPP Advantages for Private Sector 1- The PPP has benefits for both private and public sectors, the PPP models’ contracts are applicable between Private and Public sectors and applicable between private entities. 2- To summarize the advantages of PPP Models for private entities are below. 3- Private project owner can obtain EPC+F services from PPP Facilitator, 4- Private project owner can obtain best funding services as: 5- Funding against 10% cash margin plus 40% share in project, 6- Funding against Bank security such BG/SBLC as 50%face value of the project cost only (no share in project) 7- Non-refundable funding service against 100% face value MTN/SBLC/BG, no share in project and the MTN/SBLC/BG will also return to owner. 8- No risk of proposal rejection, 10- No risk of force majeure, because the project will be insured, 11- No pressure of loan payments, 12- No pressure of monthly re-payments
