Constraints related to developing small-scale PPPs and how to reduce them

The purpose of this paper is to better understand the constraints related to developing small-scale public-private partnerships (PPPs) and how to reduce them.

The paper provides a general review of the characteristics of small-scale PPPs and identifies overarching concerns.

The paper finds for small-scale PPPs constraints with respect to the definition, government processes and procedures, transaction costs, public capacity and institutional structure; important issues of transaction costs, minimum size requirement and increasing popularity and recommendations for further development.

Since most small PPPs are conducted by cities and regional governments, many local bodies would benefit from a better understanding of small-scale projects, helping to develop standard documentation, which is especially relevant for small-scale projects given their relatively large transaction and bid costs, supporting the long-term growth of small PPPs.

Small-scale PPPs have different characteristics compared with large projects and these characteristics should be studied separately. Although the benefits of small-scale projects are undeniable, relatively few have been undertaken relative to the substantial requirement. A more thorough understanding of the constraints related to developing small-scale PPPs and how to reduce them would help the subset of small projects to reach its full potential. This paper serves as a first step, clearing the ground for further research in specific areas.