Footing the Bill for Public Private Partnerships
Category: Blog

On the 15th August 2012 published an article with the above heading. It started a discussion on the topic of PPP’s with some very interesting comments. This is my contribution to the discussion:

PPP’s exist to provide the Private Partners with a Profit and the Public with infrastructure they presumably can not afford (Footing the bill for public-private partnerships, August 15). A fully documented response to a fully defined brief that can then be tendered for a fixed lump sum in the traditional manner has to be the cheapest way of achieving a defined outcome. For this method though the Government has to have the money in the bank or the means of borrowing the money. Words like “sharing the risk” are simply an excuse for not taking the time to establish a proper brief in the first place or being prepared or able to actually put the money on the table and pay for Independent Consultants or the Public Service to prepare adequate documentation for a competitive tender. If there is no public money available for such projects then we have to expect that the projects will cost more as we factor in the profit and financing costs for the Private Partners. If the Projects do not cost more we then have to expect that someone is doing something for below cost or for no profit and if that is the case we have to also expect something to give. That may mean the collapse of a Contractor or a claim on the Public coffers to reverse the situation.

There are valid reasons for adopting different delivery methods but we must all understand at the outset that there is no such thing as a free lunch and that no system will provide anything for nothing.

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