Public-Private Commercial Partnership (PPCP) is a flexible Commercial Arrangement that shares aspects of capital cost, operational costs, control and risk between public bodies and their service provider.
Public-Private Commercial Partnership (PPCP) is a flexible Commercial Arrangement that shares aspects of capital cost, operational costs, control and risk between public bodies and their service provider. Specific examples include External Operator and Concession models.
A ‘Public-Private Commercial Partnership’ (PPCP) approach can include a broad spectrum of arrangements between the LA and the service provider.
At its most basic, PPCP can encompass an approach where a supplier operates chargepoints installed and owned by the LA, in exchange for a small revenue share (the ‘External Operator’ model).
A second specific option is the ‘Concession’ approach. Here, the LA provides some capital investment, for example to establish an electrical connection point to enable a service provider to install and operate chargepoints. The LA retains some control over the quality of service and/or location of the EVI by having an active role in contract management and performance monitoring of the service provider. The risk and responsibility associated with installation, maintenance, operations, and asset utilisation is transferred to the service provider who finances the capital and replacement costs of the charging infrastructure.
More complex arrangements can be achieved, either through design or negotiation. For example, the LA could invest in the grid connection and groundworks, retaining ownership for both. The service provider procures and installs the hardware, as well as taking responsibility for maintenance and operations. The LA might also supply electricity and steer the tariff, while the supplier delivers a service to end-users. The resulting revenue share is settled according to the shares of risks and investments.
In reality, a PPCP is a sliding scale which will differ for each LA’s situation, strategy requirements and possible arrangements that the LA can make with the service provider. The contract lengths will therefore also vary depending on the agreements.
Strength
The key strength of the PPCP is that it allows for a more flexible arrangement in between the LA and the service provider. Though it is essential for LAs to consider the elements which might risk giving exclusivity to a single supplier for a long period.
Its Concession subset allows LAs to retain sufficient control over the eventual charging solution with the right terms and conditions. It can unlock private investment by more evenly sharing risk and revenue.
Risks
PPCP commercial arrangements are not risk-free – more detail can be found in EVI Procurement Risks.
Funding
The funding of the Own and Operate Commercial Arrangement can be via a range of sources, whether separately or combined:
- Internal LA capital budgets
- Regional grants
- National schemes (eg LEVI )
- Asset financing
- Equity loans