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In a public-private partnership (PPP), companies and government bodies or civil society organisations work together. In the area of housing, for example, or infrastructure. The partnership may be solely financial (donations and sponsorship), but may also involve a more concrete collaboration. PPP is based on two main principles:
- Both parties invest in the project. In a financial sense (manpower, materials budget) and in an expertise-related sense (knowledge, networks).
- The parties contribute to a societal and often also commercial purpose.
Different contract forms are possible for PPP: DBFM(O) contracts, Design & Construct (D&C) or Design & Build, Engineering & Construct (E&C) and Alliances. The most common contract form is DBFM(O). This stands for Design, Build, Finance, Maintain (and Operate). In this case, the government transfers elements of a construction project and project financing to a commercial entity. These are long-term contracts that may run for up to 30 years.
Tenders and PPP
When putting a project out to public tender, the government documents the design and execution in a set of specifications and/or schedule of requirements. In the case of PPP, the government has no expertise-related involvement. Just like normal tenders, Tenderned (Dutch) is used in the Netherlands to register for one of the Dutch government’s PPP projects.
PPP in other sectors
PPP initiatives also exist in sectors other than construction and infrastructure, for instance in the areas of security and scientific research.