Public private partnerships (PPP) are a method used throughout the world to revive public services.

One advantage of teaming up with a private company is that they can have better management skills and financial acumen than bureaucratic public bodies. However, in some countries, public sector unions have expressed scepticism over the extension of the private sector into areas which have been traditionally run publicly, like schools and hospitals.

The type of PPP for the King Edward VII Memorial Hospital project is called Design, Build, Finance and Maintain (DBFM). Bermuda Hospitals Board says this has a number of advantages including:

• many of the risks associated with the project are largely transferred to the private partner, including potential construction delays or cost-overruns;

• the new buildings are constructed to BHB's performance specifications which means it will meet Bermuda's long-term health care needs;

• BHB retains ownership of the facilities and maintains direct control over all operations that touch the patient, allowing BHB to improve patient care;

• payments are spread over many years, easing the financial burden of such a large project on the Island's population;

• the quality of the buildings are maintained by the PPP partner at a mutually agreed standard over a lengthy concessionary period, giving the partner a vested interest in building quality facilities.

Malcolm Butterfield, managing director of KPMG, which has been advising BHB, said: "One of the keys to a successful DBFM project is planning BHB's specific clinical and technical requirements prior to seeking a private partner.

"This is done by assembling a team of business, legal, clinical and technical advisers who work with BHB and the Project Board to determine the project requirements, set criteria and run a competitive procurement to identify the private partner that offers the best competitive proposal to design, build and raise financing for the new buildings and maintain the buildings over the concession period.

"This stage is critical as the criteria and selection process must be clear and transparent in order for us to have the buildings we need at the best value."