Private sector long-term participation in infrastructure projects comes under various names, including the most common (Greek and European Union) terms of concessions and Public-Private Partnerships (“PPP”s). Relevant examples include P3 (used in the United States), Private Finance Initiative (“PFI,” used in the UK), Private Participation in Infrastructure (“PPI,” used in specific World Bank references), Private-Sector Participation (“PSP,” used in development finance), Privately-Financed Projects (“PFP,” used in Australia), etc.

In principle, they all represent a form of engaging the private sector in the development (to be noted, the development part can also miss) combined with a long-term function (operation and/or facility management and/or exploitation) of a public infrastructure asset.

In the European Union, there is a clear distinction between a concession and a Public-Private Partnership contractual structure. The main differentiator between the two structures is the primary source of revenues of the private partner involved in the concession or the Public-Private Partnership contract. In detail, if the revenues of an infrastructure project with private sector participation are the result of payments by the infrastructure users (i.e., subject to the use of the infrastructure, availability of income, willingness to pay, and overall subject to demand risk), we have a clear example of a concession structure. On the contrary, where the revenues result from government, municipal, city hall, public sector authority, regional administrative authority, or national company payments (for example, availability payments, unitary charges, gate fees, etc.), we have a Public-Private Partnership structure. Of course, mixed revenue structures and payment mechanisms could involve user and government or related public authorities payments. In this case, it is critical to determine which is the majority revenue source (see also https://www.eib.org/attachments/thematic/epec_eurostat_statistical_guide_en.pdf) to conclude if the project is a concession or a Public-Private Partnership project.