Public Private Partnerships, PPP (also usually referred to in German; sometimes also Öffentlich-Private Partnerschaft[en], ÖPP)

In general, a contract by which a private company takes over public-sector tasks for a longer period of time because the privately managed company can perform these tasks more cost-effectively. – In particular, the joint financing of infrastructure projects – and here again primarily new road construction – by banks on the one hand and public authorities on the other; both partners set up a new company for this purpose. – The realization of the quota of fifteen percent of PPP in infrastructural investments targeted in Germany by about 2050 has so far failed above all because of – a lack of standardization of the corresponding contracts, – uniform rules at federal level for the profitability calculation of individual projects, – questions of equity capital procurement for individual project companies and, last but not least, – strong resistance from the state administration and the trade unions. – In September 2005, a PPP Acceleration Act became legally effective throughout Germany, improving the framework conditions for PPPs. In particular, it created equal tax treatment for public and PPP procurement, for example by exempting a PPP company from real estate tax and property acquisition tax. However, some questions regarding risk management – also in relation to Basel II – have not yet been clarified down to the last detail. – See co-investment, cornerstone investor, innovation fund, landmark building loan. – Cf. 2006 Annual Report of BaFin. p. 147 (envisaged relief for such funds); Economic Issues 40: Public Investment and Public-Private Partnerships.