What is a PPP?The Queen Elizabeth II Hospital in Maseru, Lesotho will be replaced through a PPP arrangement with South African investors and a hospital management group.
A PPP is a contract between a public sector institution and a private party, in which the private party assumes substantial financial, technical and operational risk in the design, financing, building and operation of a project. Critical to the definition of a PPP is that investment, and risk, is shared between the public and private partners.
What is a PPP not?
A PPP is quite different from the purchase of goods or services, or privatization of governmental operations. Quite specifically, a PPP is not:
- Simple outsourcing of functions
- A donation by a private party for a public good
- Privatization, or 'commercialisation' of a public function by the creation of a state-owned enterprise
- Borrowing by the state.
Other definitions of PPP
WHO and a number of journals have used the term Public Private Partnership to refer to any type of large-scale collaboration between government and industry with a health focus. Typical examples of this include StopTB, the Global Alliance for Vaccines and Immunization (GAVI), and the Global Fund (GFATM).
PPPs bring the public and private sectors together in long-term partnership for mutual benefit. They serve to help deliver better quality public services using new investment and improved management incentivized by having private resources at risk. Governments and private entities are increasingly seeking each other out to form PPPs in order to capitalize on the strengths of the other.
In Lesotho, as part of a national healthcare strategy to improve the quality of services provided to its population, the Minister of Finance and of Development Planning spearheaded the development of a $500 million PPP to replace the country’s main referral hospital in the capital city of Maseru. The contract, which was signed in 2007, is an 18-year partnership between a South African Consortium and the Government of Lesotho to replace the existing hospital and operate three feeder clinics, providing the full range of primary, secondary, and tertiary care to the population. Some call this particular model, public-private investment partnerships (PPIPs).Current Programs and Resources - Public-Private Partnerships