PPP in practice
The Government Buildings Agency controls the tendering of a PPP contract. The Agency purchases a service from a private sector party (a consortium) and supervises the conclusion of the contracts. It is clear that legal demarcations play a crucial role in public private collaboration, since the performance of the parties must be assessed and weighed.
A PPP contract revolves around responsibility: the responsibility of a private sector party that promises to provide the agreed services and is held to account for its performance. In a PPP contract, payments are made on the basis of the services that have actually been provided. A discount applies if the performance is not up to par.
Determining the added value of PPP
The PPP model is not suitable for all government properties. A minimum investment of 25 million euros has been set as a guideline for PPP projects. Because a public private partnership is a complex form of collaboration, a project must be sufficiently large in scope to qualify. To properly evaluate this, a financial and quantitative analysis must first be drawn up. This analysis will demonstrate whether the project is suitable for public private collaboration or should remain in the hands of the government.
PPP: thinking in terms of risks
Both the user of the building to be constructed or renovated and the Government Buildings Agency must have a clear idea of their long term plans with the property. In order to ensure a healthy collaboration under a PPP contract, the parties must be willing, for the duration of the contract, to transfer tasks previously carried out under own management to the contractor (i.e. the private sector party).
The PPP approach is most effective if the party that is best able to control a particular risk also bears the risk in question. In the case of a DBFMO contract, the risks associated with the coordination of the design and the execution can be transferred entirely to the contractor (e.g. the construction company), while financing the project is part of the core business of the participating bank. In the case of an integrated contract, all the risks are defined, mapped and divided between the client (the Government Buildings Agency) and the contractor (the consortium) and then expressed in monetary terms as much as possible.