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PPP Model Ensures Social and Economic Development

PPP Model Ensures Social and Economic Development

Elene Nizharadze PPP Center

A major part of the developed countries make focus on the Public to Private Partnership (PPP) model, following results of the successfully implemented PPP projects worldwide (improved social and economic conditions). With special accents on strategic infrastructure and social services, the PPP model is to create and develop projects that will improve social and economic conditions of the society.

The World Bank (WB) describes the PPP model as a long-term cooperation format between the private and public sectors (for at least 30 years) with the aim to provide improved services for the society. A considerable part of risks moves from the public sector to the private sector that also assumes responsibility for projects management. Investment returns directly depend on the performed job.

The private sector involvement in structuring, financing and implementing projects is of crucial importance to improve social and economic conditions of the population, the USAID representatives noted.

The PPP model implies mobilization of ideas, forces, resources of both private and public sectors and the whole society. And this format is one of the decisive aspects for economic growth, business-friendly environment and attainability and development of health and education services.

According to this interpretation, the PPP model calls for cooperating with the civil society with focus on philanthropic character of partnership. The format implies involvement of the society in the process for improving the living conditions, when the parties equally share the responsibilities.

Interpretation of these organizations differ from each other, to a certain extent. However, the objective of this model in both cases is the same – development and improvement of social and economic conditions of the society.

Both developed and developing countries agree that it is necessary to involve the private sector in the infrastructure development process. Therefore, it is important to analyze whether we are able to establish and develop the PPP model and implement projects that will be useful and profitable for the involved parties and the whole society.

To this end the PPP policy should be developed on national level and the strategy should be based on the following conditions and principles:

The strategy must consist of 5 basic stages: initiating, panning, implementing, monitoring and finishing the project.

It is evident that the PPP model provides universal opportunities for sustainable social and economic development of Georgia. However, it is not sufficient to only establish this model: projects must be structured and implemented in the right way for the purpose of replenishing financial and infrastructural shortcomings in Georgia.