PUBLIC-PRIVATE PARTNERSHIP AS AN OPPORTUNITY FOR INVESTMENT IN MUNICIPALITIES

Abstract

Public-private partnership is a way of carrying out activities in the public interest with the participation of non-state actors. It is inherent in the market (privatized) economy for more complex projects that require long-term and large financial resources. Public-private partnerships may not be the best option for providing public services or implementing a public project. When deciding whether to choose this type of arrangement, the local authority should be cautious and consider all factors and issues relevant to the issue. There are different distribution of risk and responsibilities in the different forms of public-private partnership. They also differ in complexity and in the expertise needed to successfully negotiate the necessary contracts. Local authorities should not take it for granted that public-private partnerships offer an easy way out of difficult problems related to public services. They should take into account that the transfer of greater risk to the private sector is associated with expectations of higher remuneration and that negotiation may require extensive expertise. In this regard, the present study reviews some of the potential benefits and risks associated with public-private partnerships.