PPP is the abbreviation of Private-Public-Project, referring to investment and construction of infrastructure based on the cooperation between government public sector and private sector to meet the city’s requirement. Many infrastructures are of public benefit, but if they are were not integrated together, they would be not worthwhile for investment and difficult to use private capitals. PPP can endow these projects with commercial value and during the period of project operation, private sector would be able to get the money back together with some profits e and meanwhile the costs born by the government are also minimized.
PPP is applied widely in developed countries, not only in the investment of infrastructure construction (water plants or power plants), but also in the construction of many non-profit facilities (such as prisons, schools, etc).
The advantage of PPP is that it introduces market mechanism into infrastructure investment. Not all urban infrastructures can be commercialized, actually the majority of infrastructures cannot be commercialized. Government should not expect that itth e government could completely retreat from the investment of infrastructures by means of market operation, , and conversely government has to keep on investing to certain extent in infrastructure. For the government, investment in PPP project is normally less than traditional projects and the difference in between is the profit that the government can gain from PPP.