Some public-private partnerships when it comes to developing new technologies include profit-sharing agreements. This usually involves sharing revenue between the inventor and the public once a technology is commercialized. Profit-sharing agreements may exist for a certain period of time or permanently. [35] Public-private partnerships also carry risks from the perspective of the public and taxpayers. Private operators` partnership with the government can prevent them from being accountable to users of public services because they cut too many corners, provide inferior services, or even violate people`s civil or constitutional rights. At the same time, the private partner may be able to increase tolls, tariffs and fees for related consumers who may be forced by law or by a geographical monopoly to pay for their services. Public-private partnerships are typically found in transport infrastructure such as motorways, airports, railways, bridges and tunnels. Examples of municipal and ecological infrastructure are water and wastewater treatment plants. Public housing includes school buildings, prisons, student residences, and entertainment or sports facilities. A 2013 study published in The State and Local Government Review found that definitions of public-private partnerships vary considerably from community to community: “Many public and private officials promote public-private partnerships for a number of activities when the relationship is in fact contractual, a franchise, or the transfer of a previously public service to a private or non-profit service.

The facility is. A more general term for such agreements is “shared service delivery,” in which public entities partner with private companies or non-profit organizations to provide services to citizens. [13] [14] As part of the Baltic Urban Lab project, the cities of Riga, Tallinn, Turku and Norrköping are facing the challenge of applying and testing the project 4P-concept.In, cities are trying to find ways to pool much-needed resources with private actors in brownfield rehabilitation projects while exploring ways to involve citizens in open processes alongside public and private actors at a early stage. By involving both private actors such as property owners and developers as well as the general public (e.B residents and NGOs) in the planning process at an early stage, cities will test ways to bridge the gap between partnerships and participation in order to create economically efficient and broadly inclusive planning processes. Nordregio will monitor and analyse these processes and, as a result, there will be more knowledge about the opportunities and problems of involving public and private actors with citizens and what can be done to create effective and inclusive processes. In economic theory, public-private partnerships have been studied through the prism of contract theory. The first theoretical study on PPPs was conducted by Oliver Hart. [21] From the point of view of economic theory, a PPP differs from traditional public procurement of infrastructure services in that PPPs group together the construction and operation phases.

Therefore, in the construction phase, the private company is strongly encouraged to make investments compared to the operating phase. These investments can be desirable, but also undesirable (e.B. if the investments reduce not only operating costs, but also the quality of service). Therefore, there is a trade-off, and it depends on the situation whether a PPP or a traditional market is preferable. Hart`s model has been extended in several directions. For example, the authors examined various externalities between the construction and operation phases[22], insurance when companies are risk-averse[23], and the impact of PPPs on incentives for innovation and information gathering. [24] [25] See how multilateral development banks have come together to support the development and implementation of public-private partnerships. When entering into a cross-sectoral partnership, problems can arise due to differences in the cultures of government, industry and non-profit organizations. Elements such as key performance indicators, target measures, government regulations and the type of funding can all be interpreted differently, resulting in unclear communication. [89] Conflicts can also be linked to territorialism or protectionism and a lack of commitment to cooperate within the partnership. [92] A business partner model would not be accurate or appropriate for a P3.

[91] The private partner may be exposed to particular risks when entering into a public-private partnership. Physical infrastructure such as roads or railways is associated with construction risks. If the product is not delivered on time, exceeds cost estimates or has technical defects, the private partner usually bears the burden. In addition, the private partner is exposed to a risk of availability if it is not able to provide the promised service. A company may not meet safety standards or other relevant quality standards, for example. B if it operates a prison, hospital or school. Demand risk occurs when there are fewer users than expected for the service or infrastructure, e.B toll roads, bridges or tunnels. However, this risk can be transferred to the public partner if the latter agrees to pay a minimum fee, regardless of the request. For more than two decades, public-private partnerships have been used to finance health infrastructure. In Canada, they cover 1/3 of all P3 projects nationally. [8] Governments have focused on the ppp model to solve key healthcare problems. However, some health-related PPPs have been shown to cost much more than those developed under traditional public procurement.

[79] The imbalance between the influence of private actors and the general public is also influenced by the time interval between public-private partnerships and public participation. It is recognized that binding agreements between public and private actors can define development principles from the beginning of the project, while public participation processes often take place later in the process. It should be noted that the lack of public participation at the beginning of planning processes may increase the focus on economic considerations and the economic sustainability of the project to the detriment of creating a livable urban environment based on the needs of local communities. .