Public-Private Partnership: A Key to Sustainable Development or a New Challenge?

In recent years, public-private partnerships (PPPs) have become a significant topic in discussions about the future regulation of utilities, infrastructure, healthcare, and other sectors crucial to society. While many see an opportunity for local and regional development and the introduction of new services, others question whether PPPs are truly the most efficient way to address the challenges we face.

A public-private partnership is a collaboration between the public sector and private enterprises with a shared goal: improving services and infrastructure by introducing new technologies and increasing efficiency. At first glance, this model offers many advantages - private sector involvement provides the necessary financial resources and expertise that the public sector may lack. However, does everything function in practice as it should?

Great Benefits, but Also Risks

Driven by the need for modernization and infrastructure development, many cities and countries worldwide rely heavily on PPPs. From building highways and hospitals to improving educational and energy systems, private companies provide capital and technical expertise, while national and local governments take on the responsibility of protecting public interests and ensuring benefits for local communities. On the other hand, the challenges should not be underestimated. Private companies, of course, have their primary interest - profit. Since the goal of any PPP is to create a win-win situation for both parties, the question often arises: are the interests of citizens truly protected in such partnerships?

Institute for Territorial Economic Development (InTER), through the regional project “Implementing Good Governance Principles in Public-Private Partnership Projects (GO PPP),” funded under the SMART BALKANS program by the Norwegian Embassy in Belgrade, is continuously working on introducing good governance principles in PPPs - enhancing citizen participation, transparency, accountability, and efficiency. Through clear (and publicly available) contracts, accountability measures, and oversight, it is possible to ensure that private companies do not overstep boundaries and that all resources are used in the public interest.

One of the greatest potentials of PPP projects lies in the introduction of innovation and new technologies. The private sector can often bring advanced technological solutions that improve service quality. For example, in the healthcare sector, PPPs can facilitate the acquisition of state-of-the-art medical equipment and better treatment conditions for patients. However, the question remains whether the commercialization of public services is the right path. When private enterprises become involved in education or healthcare, there is a concern that essential services might become a luxury, accessible only to those who can pay more.

What’s Next?

Public-private partnerships have the potential to contribute to faster development and enhance the quality of public services, but only if they are properly managed and monitored. When approached appropriately, PPPs can become a driver of innovation and sustainable development. Otherwise, there is a risk that such projects could become a tool for the privatization of public resources, leading to long-term negative consequences for society. As we consider the future of PPPs, one thing is certain - ensuring that both public and private partners always prioritize the interests of citizens must remain a key priority.

The article was published on Prva portal.