Fair PPP: A New Approach to Public-Private Partnerships
Developed by Dr. Mehmet Atın, Fair PPP is designed to address the shortcomings of traditional PPP models, offering a more balanced and transparent framework.
1. PPP Failures
The traditional PPP model has failed to meet its promises of innovation, higher quality service, efficiency, and a fair balance of risk and profit. For example, data shows that many transportation and water PPP contracts in Latin America have had to be renegotiated.
- 14 of the top 20 airports in the world are under public management.
- IATA and Lufthansa's CEO criticized airport privatization due to increased tariffs and inefficiencies.
2. What Was Promised in PPP?
- Innovation
- Higher quality of service
- Efficiency
- Balanced risk and profit sharing
- Customer satisfaction
3. Why PPP Couldn't Succeed
Public personnel were distanced from operations in PPP projects, leading to poor oversight. Airports became more commercialized, but without a fair balance of risk and profit. During times of high profits, the private sector benefited disproportionately, while during crises like the pandemic, the public sector absorbed most of the losses.
The most successful revenue generation model in North American airports was the Master Concession model, which PPP failed to implement effectively. Fair risk and profit sharing remained unclarified in PPPs.
4. What is Fair PPP?
Fair PPP proposes a different model, where public personnel are actively involved in the operations of projects, ensuring better supervision and transparency. Key aspects include:
- Full transparency through a joint board of public, private, and lender representatives.
- Fair risk and profit sharing.
- Know-how transfer between public and private sectors to ensure public personnel gain the necessary skills.
- Public officers working on the ground, not just in managerial positions.
- Clear explanations of tariffs based on cost and revenue data.
5. Fair PPP vs. Traditional PPP
| Traditional PPP | Fair PPP |
|---|---|
| Public sector only monitors; private sector operates. | Public personnel actively involved in operations. |
| Limited transparency due to trade secrets. | Joint board ensures full transparency. |
| Know-how transfer is rare. | Public personnel are trained alongside private personnel. |
| Risk and profit sharing often favors the private sector. | Risk and profit are fairly distributed through transparent agreements. |
6. Who Developed Fair PPP?
Fair PPP was developed by Dr. Mehmet Atın, who has over 13 years of experience in the airport sector. He has a PhD in PPP and has reviewed and advised on numerous PPP projects, including those at Antalya Airport.
7. Contact Us
If you would like more information about Fair PPP or consultancy services, please contact us:
Email: [email protected]
LinkedIn: Dr. Mehmet Atın