PPPs are a real buzzword in Europe and globally. In recent years, we have been surrounded by claims that the private sector is more efficient and better placed to deliver public services like transport, energy, education, health, water and sanitation. But is this really the case?
This study shows that in fact, the contrary is true. There are eight main reasons why PPPs are not working:
PPPs do not bring new money – they create hidden debt.
Private finance costs more than government borrowing.
Public authorities still bear the ultimate risk of project failure.
PPPs don’t guarantee better value for money.
Efficiency gains and design innovation can result in corner-cutting.
PPPs do not guarantee projects being on time or on budget.
PPP deals are opaque and can contribute to corruption.
PPPs distort public policy priorities and force publicly run services to cut costs.
The report covers PPPs in the water sector, as well as many other sectors, like transport, health and energy. We use concrete examples to illustrate why PPPs are not delivering.
Now is the time for policy makers to look at the hard facts, and refrain from promoting PPPs in Europe and abroad. We hope this report will contribute to a reassessment of this issue.
The study was commissioned by EPSU and Eurodad, written by Jane Lethbridge (PSIRU) and Pippa Gallop and was coordinated by Richard Pond (EPSU) and María José Romero (Eurodad).