Running a Government's P3 Program: Special Purpose Agency or Line Departments?

Abstract

Governments around the world are embracing public–private partnerships (P3s) as vehicles for the effective provision of public infrastructure such as roads, hospitals, schools and prisons. In the process, they have adopted a variety of organizational models to assist them in project planning and delivery. Many have created specialized cross-sectoral agencies (“special purpose agencies”) mandated to implement a government's P3 agenda (e.g. explore P3 opportunities and implement approved P3 projects), and staffed with P3 expertise. Others have relied more on developing the necessary expertise within the client or “line departments” as a complement to existing traditional infrastructure programs. This paper explores the economic tradeoffs, advantages and disadvantages a government must consider when it chooses between these alternative models.