Explanation:

Contractual PPPs: In the scope of purely contractual PPP, there are different kinds of arrangements that depend on the characteristics of the contractual relationship and delegation of tasks to the private partner. Some of the best known models are in the development of urban infrastructure facilities: the associated provision of services corresponds to the “concession model”. In this situation there is a direct link between the private partner and the final user: the private partner provides a service to the public “in place of”, though under the control of, a public authority. The private party assumes all the responsibility relative to the construction, operation and maintenance of the infrastructure assets, charging users for the service. Usually the concession model is associated with long contractual periods, matching the long asset life of infrastructure.

Institutionalized PPPs: Institutionalized PPPs (mixed companies) imply the establishment of an entity held jointly by the public partner and the private partner. The joint entity thus has the responsibility of ensuring the delivery of a work or service for the benefit of the public. The establishment of an institutionalized PPP can be done either through an entity where public and private sectors jointly participate or through private sector buying and owning shares in an existing public company. Usually the public partner controls the company either as shareholder or through special rights it may hold and the private partner operates the service. This kind of cooperation between public and private partners can be very positive since the public partner keeps control over the infrastructure service, it may allow for service adjustment over time according to changing needs, conflicts are resolved internally and the public partner acquires know-how from the joint work with the private party.