A Public-Private Partnership is defined as a contractual agreement between a public agency (federal, state, or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to sharing resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility. In effect, the key defining elements of a PPP is the focus on service delivery and a real partnership that involves sharing risks and rewards.

PPPs have been used for the delivery of services worldwide in sectors like power, education, roads, aviation, and even in some specific segments of defence services like facility maintenance and simulators procurement/training.

There are three main reasons that motivate governments to enter into PPPs for infrastructure and service:

  1. To attract private expertise and or capital investment for infrastructure and service delivery improvements (often to either supplement scarce public resources or release them for other public needs).
  2. To increase efficiency and use available resources for infrastructure and service delivery more effectively.
  3. To reform sectors through a reallocation of roles, incentives and improve accountability