BUILDING ECONOMICS I ASSIGNMENT IV I 1180100739

PUBLIC PRIVATE PARTNERSHIP AND ITS PROPERTIES

A public-private partnership (PPP) is a partnership of the public and private sectors for the
delivery of a project or service that is typically handled by the public sector.

In accordance with the National Public Private Partnership Policy 2011, a Public Private
Partnership (PPP) is an agreement between the government, a statutory entity, or a
government-owned entity on the one side, and an entity from the private sector on the other,
for the provision of public assets and/or public services, through investments made and/or
management undertaken by the private sector entity, for a specific amount of time, where there
is a clearly defined allocation of resources.

Public-private partnerships (PPPs) come in a variety of shapes and sizes, with the private party's
level of involvement and risk taking changing. To properly allocate risk and lay out each party's
obligations, PPP conditions are often outlined in a contract or agreement.

Examples of sectors involved in PPP-

While PPPs can cover a range of projects across various sectors, there are several that are most
associated with these types of initiatives. Here are a few examples.

• Transportation. PPPs are being used to finance, build and operate many different types
of transportation infrastructure, including roads, bridges, tunnels, airports, seaports,
railway systems and public transit.
• Power and energy. P3s have been used to finance and construct electricity generation
plants (including nuclear), electrical transmission lines and natural gas pipelines.
 • Water and wastewater. P3s have been used to finance, design, construct and operate
water treatment plants, desalination plants and sewer systems.
• Telecommunications. P3s have been used to fund broadband networks and other
telecommunications infrastructure rollouts.
• Healthcare. P3s have been used to finance the construction of hospitals, clinics and
other healthcare facilities.
• Education. P3s have been used to finance the construction of educational facilities such
as schools, colleges and universities.
• Social infrastructure. P3s have also been used to finance the construction of prisons,
courthouses and other social infrastructure.

The different types of PPP construction projects are:

1. Build Own Operate Transfer (BOOT)-

The project will be turned over by the government to a company in the private sector to
complete as the name implies: to create and construct the Project; Transferring ownership and
operation of the Project to the Government or a Partner; The management of the finished
project must be carried out for the predetermined amount of time as specified in the agreement
before being finally passed to the government. Based on the previously agreed price or market
price, the transfer to the government or partner is made.

2. Design Build Operate (DBO)-

The public owns the facility technically, but a single contract is given to a private company to
design, construct, and run it.

3. Build-Own-Lease-Transfer (BOLT)-

The government authorizes the financing and construction of a project, which is subsequently
leased back to the government for a predetermined period of time and a fixed cost. The
government is in charge of running the facility. The project is turned over to the government at
the conclusion of the predetermined term.

4. Rehabilitate Operate and Transfer (ROT)-

In the case of ROT, the private sector is permitted to undergo the following activities on an existing
facility- Refurbish, Operate, Maintain

5. Design-Build-Operate (DBO)-
 In the instance of DBO, the facility is designed and constructed using a turn-key approach.
The facility is handed over to the public sector after construction is finished, however it is
first operated by the private sector. The Build Transfer Operate is another name for the DBO
(BTO).

6. Lease Renovate Operate and Transfer (LROT)-

In this kind, the current infrastructure is given to a private facility for a specific amount of time.
This is granted for a set amount of time to operate after renovation. The operation is carried out
subject to the private facility recovering the agreed-upon cost in return in accordance with the
contractual agreement and passing the entity back to the government.

7. Rehabilitate Own and Operate (ROO)-

For the purpose of renovation, this kind will hand over the facility to the private sector. Once
the work is done, any private business may carry out the operations without restriction as to
ownership or duration. The facility must be used indefinitely as long as the franchise is not
broken.

8. Develop Operate and Transfer (DOT)-

According to the deal with the DOT, the private developer will be given favorable terms to build
the infrastructure project and the authority to develop the adjacent property. Therefore, the
private developer is permitted to take advantage of the advantages brought about by the
investment. Rents and property values are included in the investment.

9. Build Operate Transfer (BOT)-

One of the most typical privatization contracts is the BOT. The government will grant the private
sector the building and operation rights under this agreement. This will be provided for a pre-set
amount of time. This will be returned to the government by the end of the time. One of the
BOT's flexible options is allowing the private sector to carry out the planning and design in
accordance with the contract. Below are some of the additional BOT types, including BOOT,
BOO, DBOM, and DBOT.

10. Build Own Operate (BOO)-

A private organization, which keeps ownership of the project, is given permission by the
government to fund, design, build, run, and maintain a project. The facility does not have to be
returned to the government by the private enterprise.
 11. Design-Build (DB)-

According to the terms of this project agreement, the government hires a private partner to
design and construct the facility in accordance with its specifications. In addition to the deal, the
government will outline who is responsible for running and maintaining the facility. Additionally
known as Build-Transfer, DB (BT).

12. Buy Build Operate (BBO)-

The government transfers ownership of the facility to a private company. The facility is
renovated and run by a private company.

13. Design-Build-Maintain (DBM)-

This model is similar to Design-Build except that the private sector also maintains the facility. The
public sector retains responsibility for operations.

14. Build-Develop-Operate (BDO)-

The private business buys the public facility, refurbishes it with its own resources, and then operates
it through a government contract.

15. Contract Add and Operate (CAO)-

According to the terms of the CAO contract, the project developer will add on to an
infrastructure facility and rent it from the government. This is run for the predetermined
amount of time. The project developer may or may not handover this project back to the
government.