Identifying a Project Suited for Public-Private Partnership

Public Works Resource
May 30, 2012 — 1,222 views  
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Coca-Cola needs clean water to make its beverage products. Villagers who consume Coca-Cola need clean water for everyday living. To meet those needs, Coca-Cola partners with the U.S. Agency for International Development in over 20 countries to create clean water systems. Public private partnerships like this create both financial and humanitarian benefits for communities around the world.

Good public private partnerships should meet several criteria. Some projects demand more resources than a public entity can provide. For instance, the government may have insufficient financial resources to pay for a project, which would require the government to solicit private investment. The government may also lack sufficient expertise to execute a project, which would require them to tap into talent from the private sector.

In some cases, partnering with a private entity results in a better end product. For instance, a public private partnership may ensure that a service or product is implemented much more quickly than it would be with government resources alone. Also, working with a private entity may deliver better service quality than the government alone could provide.

Public private partnerships can also create an atmosphere of opportunity. These projects can create an environment of innovation in which competing private entities create the very best proposals for providing products or services to the public. Also, the project can promote economic development and can allow the public and private sectors to build a shared history of partnership.

For public private partnerships to succeed, the parties involved should make certain that the partnership has the support of those who use the services. Also, the outputs should be easy to measure and to price so that both organizations are accountable to the public or to their shareholders. Finally, the project should be able to recover costs for both entities through user fees or by other means of generating revenue.

After checking to make sure that public private partnership meets the criteria, and after ensuring that no statutory or regulatory prohibitions exist, the two entities can then move forward with the project. In general, projects for which access cannot be restricted, such as police and fire protection, are not the best candidates for a public private partnership. However, in many instances, public private partnerships like those between Coca-Cola and USAID can have a positive impact in the community and around the world.

Public Works Resource