WHAT IS A PUBLIC-PRIVATE PARTNERSHIP (PPP)?

The Law On Public-Private Partnerships approved by Parliament Resolution No. 7 on 24 February 2012 defines a Public-Private Partnership (PPP) as a long-term (up to fifty years) interaction between public and private partners for engaging the private partner by the public partner in designing, financing, construction, rehabilitation, reconstruction of assets, as well as the management of existing or newly created assets, including infrastructure assets. In other words, a PPP is: a contract between a public partner (contracting authority) and a private sector entity (usually of medium or long-term duration) awarded through competition where the private partner performs a public function (e.g. provides infrastructure, a service to the public, or both) and is allowed to develop the best way of providing the infrastructure or service (so-called ‘output specification’) but where it also carries the risk that if it does not perform well its payments will be affected (so-called ‘risk allocation’).