We find an ever-increasing need for infrastructure on a global level. Population growth and decline (in developed countries), rudimentary design of ageing infrastructure in all fields and increasing urbanisation have pushed governments and administrations to the limits of their financial endurance.

At the same time, it is found that basic needs of people in many countries (developing and emerging countries) are not met:

• 1.3 billion people have no access to electricity
• 800 million people do not have access to clean water
• 2.5 billion people have no access to modern sanitation facilities
• Almost 25% of the world’s population lives on less than $ 1.25 a day.

This list goes on and on.

However, the developed and industrialised countries must adapt and progressively modernize their infrastructure through social and technological developments in order to maintain their competitiveness and living standards. This affects not only the transportation, telecommunications, energy and water infrastructure, but also education and health sectors.

While the demand for infrastructure is massively increasing worldwide, the supply has slowed down due to various factors (including public debt, lack of “know-how”).

The result is an annual global infrastructure investment gap of one trillion US dollars until 2030.

Still, it is not only the financing which inhibits the development: The contracting authorities lack principle and technical know-how.

UNESCO estimates that the countries south of the Sahara need 2.5 million new technicians and engineers to achieve their “Millennium performance targets”. While many industrialised countries formerly led in the number of students in the engineering field, the same has now decreased significantly.

Conventionally, for various reasons, not overcoming major infrastructural deficits hampers economic growth and development in the countries affected, with far reaching consequences not only for the people living there, but also for the intended global peaceful understanding.

The challenges described above cannot be solved without the involvement of the private sector.
PPPs are a proven model to bridge the gap between pent-up demand in the infrastructure sector with national priorities. With the resources and capacity in line, the use of know-how by the private players for public purposes, to attract capital for public functions and in a partnership to create a “win-win” situation for both players.

In a PPP, the contracting authority contractually agrees with the private client for the fulfilment (complete or partial) of a (previous) public service task, while being transparent about the objectives, scope, quality, duration, price and risk allocation for the contract term specified for the “life cycle” of the investment and/or performance and the payment of which depends on the degree and quality of the fulfilment of the contractual components.

The contracting authority defines the project objectives, while the private partner takes up the responsibility of fulfilling them. The ownership of infrastructure is retained in public domain contrary to privatisation.

A successful PPP enables the contracting authority

• to significantly improve its services
• to experience sustained increase in efficiency
• to mobilize and involve private capital for public interest.

PPPs are not the answer to all the problems and challenges of the world.

However, they are an

• available
• successfully tried and
• accepted model

which is sustainable, innovative and can be adapted as per the situation in the present and the future to meet the described principles.

Therefore, global institutions such as the UN, World Bank and European Investment Bank among others have also created their own programs, organizations and networks to promote and develop cooperation between the public and private sectors at a global level.

Public-Private Partnership is therefore an area in which the Diplomatic Council may develop due to its principles and statutes of its global network and present the know-how therein and use it for the good of the States and the people living in them.