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

Public-Private Partnership (PPP): procurement-law fundamentals, concession models and procedures for cooperation between the public sector and private business.

Definition: A Public-Private Partnership (PPP) is a long-term form of cooperation between a public contracting authority and one or more private undertakings, under which private partners assume the planning, construction, financing, operation and/or maintenance of public infrastructure, with procurement law governing the selection of the private partner.

Last updated: January 2026 · Legal basis: Directive 2014/23/EU, GWB, KonzVgV, BVergG 2018, federal-state PPP guidelines

What is a Public-Private Partnership?

Public-Private Partnerships are long-term contracts under which public contracting authorities transfer the creation and/or operation of public infrastructure to private partners, who receive remuneration in return from user charges or public payments. The PPP model combines the planning and operating expertise of the private sector with the public interest in high-quality, cost-efficient infrastructure provision. PPP models are used, among other things, for schools, hospitals, roads, prisons and public buildings.

Procurement-law classification

PPP projects are classified under procurement law either as public contracts or as concessions – depending on who bears the operating risk. The distinction is decisive for the applicable procurement regime:

Public contract: Where the contracting authority bears the substantial economic risk (e.g. through fixed remuneration). The VgV or VOB/A applies.
Concession: Where the private partner bears the substantial operating risk (e.g. through user fees or performance-related remuneration). The Concession Award Ordinance (KonzVgV) and Directive 2014/23/EU apply.

Procedure for selecting the PPP partner

The selection of the private partner must take place by competition; the appropriate procedure is generally the negotiated procedure with a call for competition or the competitive dialogue. The latter is particularly well-suited to complex PPP projects in which the contracting authority knows the need but not the optimal solution. In both procedures, requests for participation are first sought before selected candidates are invited to submit bids or solutions.

Contract structure and term

PPP contracts are typically very long-term (10–30 years) and include provisions on construction, financing, operation, maintenance, risk allocation and contract termination. The term is a key feature: it must be set so that the private partner can recoup their investments and achieve an appropriate profit. At the same time, the term should not be longer than necessary to achieve this purpose.

Risk allocation

A central element of every PPP project is the allocation of risk between the public and private partner. Risks should in principle be borne by the party best able to manage them:

Private risks: Construction risks, operating risks, technology risks
Public risks: Regulatory risks, force majeure events, political risks
Shared risks: Demand risks, inflation risks

PPP in Germany and Austria

In Germany, PPP projects are carried out at federal, state and municipal level; there are no specific PPP laws, and the rules of the GWB and KonzVgV are decisive. ÖPP Deutschland AG (Partnerschaften Deutschland) offers advisory support. In Austria, the PPP model is also widespread; the BVergG 2018 and the concession award rules form the legal basis.

Advantages and disadvantages

PPP models promise efficiency gains through private management expertise and life-cycle optimisation, but are also viewed critically with regard to cost efficiency, democratic control and long-term commitment.

Advantages:

Use of private efficiency and innovation
Transfer of risks to private partners
Acceleration of infrastructure projects

Disadvantages:

Complexity and high transaction costs
Long-term contractual commitment restricts flexibility
Transparency and democratic control may suffer

FAQ

Is a PPP project always subject to procurement rules? Yes. The selection of the private partner is subject to procurement law, either as a public contract or as a concession.

What distinguishes a PPP from a concession? Both may exhibit PPP structures; the difference lies in the risk allocation. A concession exists where the private party bears the operating risk.

How long may a PPP contract run? The concession award rules do not set a rigid maximum term, but require that the term not exceed what is necessary for amortisation.

Can municipal authorities conclude PPP contracts? Yes, provided that the respective state law does not contain restrictive rules and the budget-law conditions are met.

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