The growth in Public-Private Partnerships (PPP) as a way of fulfilling public tasks in partnership between the State and private enterprises is one expression of the current trend in privatisation. Constrained by the limited public funds available, governments are increasingly seeking means of cooperating with private investors in financing infrastructure projects. On top of this, the EU policy on competitive tendering of public works and services has forced changes towards a more market oriented approach to delivering tasks for which the state is responsible. Relevant to this end is also the pro-privatisation argument that state entities are less efficient and that management concepts typical in the commercial sector should be used to achieve more cost-effective provision of public services.

In this context, nowadays a shift can be noticed away from the role of the state as “producer” towards one as “quality assuror” and a trend away from the provision of infrastructure and public services at no cost, financed from public budget, to financing frameworks in which these are paid by the end users. The Private Finance Initiative (PFI) is a method to provide financial support for projects undertaken under private-public arrangements. Developed in 1992 by the UK Government, this concept is currently used in numerous countries around the world.

Each PFI project is different depending on local circumstances. However there are some common threads that run through all projects. The public sector authority signs a contract with a private sector "Operator". During the period of the contract the Operator will provide certain services, which are currently provided by the local authority. The Operator is paid for the work over the course of the contract and on a "no service no fee" performance basis. The authority will design an "output specification" which is a document setting out what the Operator is expected to achieve. If the Operator fails to meet any of the agreed standards it should lose an element of its payment until standards improve. If standards do not improve after an agreed period, the public sector authority is entitled to terminate the contract.

As governments turn to the private sector to provide services once delivered by the public sector, their agencies must have new skills and competencies: design projects with a risks/incentives balance that make them attractive to the private sector, assess the cost to tax payers, contract management skills to oversee the project over its lifetime, advocacy and networking skills across different sectors and levels of government. An increasingly common way to achieve this is through establishing cross-sectoral PPP units. The international experience shows that making the right choices on what roles such units play, where they are located within the public administration, and how conflicts of interest are managed is critical to their success.

The PPP units could perform a number of functions ranging from information and guidance, advisory support and funding, up to de jure or de facto approval of PPPs developed by line agencies.

PPP units that mainly provide information and guidance are often set-up as a cell within an existing government agency (finance, treasury, planning). However, if the unit is to provide transactions support, it must have the appropriate expertise or organisational structure to be able to buy it in from the private sector. The worldwide options are various, like:
- government owned company - Partnership British Columbia;
- autonomous entity, attached to but not fully part of government’s bureaucracy – Philippine’s BOT Centre;
- joint venture company owned in part by private shareholders – Partnership UK.

However, the overriding factors for the most appropriate administrative structure and positioning of the unit relate to ensuring its high visibility, strong influence and clear political backing.