The profitable public projects are partnered with private companies to ease the load of payment and budget. The investment from private companies has resulted in positive growth and avoids fraud in money matters as everything is agreed in pre-contract.
The benefit to the government
There is a lot of development taking place in the Asian countries, increasing the government’s burden. It is nearly impossible for the government to invest in all the developments alone; they have to develop private sectors and privately held companies with PPP finance. The partnership with private companies has always been beneficial to the government as the investment cost is equally distributed among them.
The public-private partnership or PPP finance has never been a flop idea, and it always leads to better development, ensuring long term relations. The investment in the sector of the railway has few factors, mainly:
- Price: The price factor plays a vital role in the development of railways as the maintenance is heavy, given daily travelers’ number.
- Labour: It becomes difficult to hire laborers for heavy projects, given the price factor from the government, which is usually kept low and on market prices, hiring becomes expensive; here comes a private partnership to decrease the burden.
- Place: The place where the development is to be done is highly important become local companies are contacted for development. It becomes more viable as the development will help them more. Transportation is one of the major factors in business.
The trend of developing countries by partnering with corporate firms of local investing business is growing rapidly. It all started with partnering with a well-known company for the metro project. It does not give complete authority to the private partnership but gives some access to the matters that help the business grow, attracting the partnership from government-allowed projects.