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PPP TOOLKIT for Improving PPP
Decision-Making Processes
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Sector: State Highway  |  Module 1: PPP Background

Overview of PPP modal variants

Public-private partnership’s (PPPs) can take a range of types encompassing various roles, ownership arrangements, and allocations of risk between the private and public partners. These different types are called PPP modes. Common examples of different modes are management contracts, lease, build-own-operate (BOO) contracts, and build-operate-transfer (BOT) contracts. In the roads sector, BOT is a common PPP mode, with revenues for the private operator often being from tolls (BOT Tolls contract) or from a fixed annual/semi-annual payment (BOT Annuity contract).

This section provides more detail on the main PPP modal alternatives. It is important that practitioners understand the various PPP modal options and their applicability or appropriateness to specific project types and sectors. After reading this section PPP practitioners should have acquired a set of analytical tools that will aid them in selecting the appropriate PPP mode.

The PPP modes that have common characteristics can be grouped into ‘families’. Within these families lie a vast range of possible modal combinations and variations to suit the particular project. These variations, which are sometimes subtle and embedded deep in the contractual detail of the project, are too many to be discussed here. The task of defining a project to this level of detail and defining it in the contract will usually be carried out by specialist transaction advisors. This toolkit focuses on the major modal families.

The toolkit includes a Mode Selection tool to help choose the PPP mode that is most appropriate for a project. This can be used to carry out a qualitative assessment of the PPP modal options for the project by comparing possible allocations of the project risks against the typical allocations under the different PPP modes. The Mode Selection can be accessed here.


This section covers the following:

 
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