The next development of concessions is franchising. The franchise is the right to use a completed installation, synonymous with a concession, but without the initial phases of construction. Franchisees or concessionaires make lump sum payments to public authorities in exchange for these rights. Franchises are not considered public-private partnerships, as described above, since franchises do not involve the provision or modernization of infrastructure, but only their operation. In Europe, franchise concessions are called “service concessions”, while concessions involving the construction of new infrastructure are called “work concessions”. Another important factor in developing the AAE contract model is its financing technique, known as “project financing”, which provides a significant portion of the long-term debt financing required by the project. An important aspect of “project financing” is the transfer of risk from the project company to subcontractors. Aggrement`s sales contract is the link between the two parties when an agreement has been reached, although no delivery of goods or payments has taken place. Because it is governed by Article 1458 of the Civil Code. On the other hand, the government has currently designed and built equipment that extends to state regulation, underwriting companies, and infrastructure fund managers (such as equity funds). These include state bailout operations in the form of the Viability Gap Fund, as well as funding mechanisms by financial institutions such as PT Sarana Multi Infrastruktur and PT Guaranty Infrastructure Indonesia. It can be argued that PPP allows private investors to benefit from the provision of services that the public sector can provide at a lower cost.
However, many elements of the PPP structure, such as. B the construction of facilities, may be provided by the private sector. The marginal additional profits made by the private sector from investing in PPP projects, compared to those of direct allocation in general, may not be large enough to maintain this argument. . . .