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.
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.
The operational and project execution risks are transferred from the government to the private participant, which usually has more experience in cost containment.
High-quality standards are better obtained and maintained throughout the life cycle of the project.
Every public-private partnership involves risks for the private participant, who reasonably expects to be compensated for accepting those risks. This can increase government costs. When there are only a limited number of private entities that have the capability to complete a project, such as with the development of a jet fighter, the limited number of private participants that are big enough to take these tasks on might limit the competitiveness required for cost-effective partnering. Profits of the projects can vary depending on the assumed risk, the level of competition, and the complexity and scope of the project. If the expertise in the partnership lies heavily on the private side, the government is at an inherent disadvantage. For example, it might be unable to accurately assess the proposed costs.
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