Public private partnerships, also known as P3s, are an alternative finance and procurement model where the public sector entity procures infrastructure using a private sector partner. The private sector partner's obligations include requirements to:
- design, build, acquire, or better new or existing infrastructure;
- finance the transaction past the point where the infrastructure is ready for use; and
- operate or maintain the infrastructure.
This standard does not apply to:
- traditionally procured infrastructure where the public sector entity controls the asset and bears the associated construction and financial risks;
- leased infrastructure that does not satisfy the criteria for recognition of an infrastructure asset as part of a public private partnership agreement;
- operating and maintenance arrangements with a private sector partner where it is not necessary to design, build, acquire, better, or finance public infrastructure
- public private partnerships where there is no financing required by the private sector past the point where the infrastructure is ready for use;
- write-downs of infrastructure; or
- accounting for and reporting a public sector entity's interest in a partnership where the partners cooperate in achieving significant, clearly defined common goals.
To see the business impact of the new P3 standard, see this infographic
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