Public-Private Partnership (PPP) in Public Procurement Law 2026

PPP – Public-Private Partnership: cooperation model between the state and the private sector for infrastructure and public services.

Definition: A Public-Private Partnership (PPP) is a long-term, contractually regulated cooperation between a public contracting authority and one or more private companies, in which planning, construction, financing and/or operation of a public infrastructure or service is transferred to the private partner.

Last updated: January 2026 · Legal basis: Directive 2014/23/EU (Concessions); BVergG 2018; PPP guidelines of the federation and states

What is a public-private partnership?

Public-Private Partnerships (PPP) are an instrument by which public tasks are performed with the involvement of private resources, expertise and capital. They are typically designed for terms of 15 to 30 years and frequently concern the areas of infrastructure (roads, bridges, schools, hospitals), energy, water and public services.

PPP models differ fundamentally from classical procurement: not only the construction service, but the entire life cycle of a project – from planning through construction to operation – is transferred to the private partner.

PPP models at a glance

There are various PPP models that differ in the distribution of tasks between the public and private partner:

Model	Content
Purchaser model	Private partner builds; contracting authority purchases
Leasing model	Private partner builds and leases to the contracting authority
Rental model	Private partner builds, operates and rents
Concession model	Private partner finances, builds and refinances through user fees
Cooperation model	Joint company (institutional PPP)

Procurement law classification

PPP projects are relevant under procurement law and must – depending on their specific design – be tendered in accordance with the applicable procurement or concession award rules. If the project exceeds the EU thresholds, an EU-wide notice is generally required.

If the PPP model contains an operating component with demand risk for the private partner, there is often a concession within the meaning of Directive 2014/23/EU.
If the public contracting authority bears the economic risk, a classical works contract or service contract is more likely.

Advantages and risks

Advantages

Mobilisation of private capital for public investments
Use of private-sector efficiency and innovation
Life-cycle-oriented cost consideration
Risk transfer to the private sector

Risks

Complex contract design and long-term commitment
Risk of disadvantaging the public partner
Limited flexibility in case of changing requirements
Higher transaction costs

Austrian and German context

In Austria and Germany, PPP models have varying degrees of dissemination and are subject to specific regulations. In Germany, the federation has developed PPP guidelines and standard contracts (e.g. PPP in motorway construction). In Austria, PPP models are increasingly being used in school construction, hospitals and the infrastructure sector.

Related terms

FAQ

Must a PPP always be tendered? Yes, provided that the award exceeds the relevant thresholds. The type of tender (classical award or concession award) depends on the specific contract design and the allocation of risk.

What distinguishes a PPP from a simple contract award? In a classical contract award, the contracting authority commissions a single service. In a PPP, the private partner assumes comprehensive long-term responsibility for planning, construction, financing and operation.

Which authorities review PPP projects in Germany? The Federal Court of Auditors and the state courts of auditors have repeatedly reviewed PPP projects. There is an obligation to conduct an economic feasibility study under the Federal Budget Code (BHO).

Last updated: January 2026 All information without guarantee. For legally binding information, please consult a law firm specialising in procurement law.