Public Private Partnerships – Can They Deliver Better Value for Money?

The document examines the systemic failures of public-private partnerships (PPPs), citing the collapse of Carillion in the UK and concerns over the US 'Rebuilding Infrastructure' plan. It argues that PPPs often fail when used primarily to keep debt off public balance sheets, leading to poor project preparation and skewed risk allocation. To improve outcomes, the author suggests moving toward systemic master planning, enhancing public sector negotiation skills, and adopting procurement strategies that prioritize lifecycle value over the lowest bid. The paper emphasizes that for PPPs to support the UN Sustainable Development Goals, they must be designed with transparent, equitable contracts and a focus on sustainable development rather than just financial returns.

• The collapse of the UK-based firm Carillion in January 2018 illustrates the risks of PPPs, where cost overruns and delays in projects like the Midland Metropolitan Hospital, Royal Liverpool Hospital, and Aberdeen bypass led to liquidation after the company bore significant financing and construction risks.
• The United States' USD 200 billion 'Rebuilding Infrastructure' plan is criticized for prioritizing projects that can secure non-federal funding (weighted at 70%) over those that spur economic and social returns (weighted at 5%), which may lead to the neglect of essential infrastructure for lower-income citizens.
• Governments frequently misuse PPPs as a mechanism to keep debt off public balance sheets, which the 2016 Eurostat Guide suggests can compromise sound project preparation and value for money.
• In middle- and lower-income African countries, high median debt levels (above 50% of GDP) and rising interest rates in North America and the EU increase the cost of servicing infrastructure bonds, straining public budgets.
• The World Bank Group's 2017 Guidance on PPP Contractual Provisions is viewed by stakeholders, including IISD, as being biased toward private counterparties, failing to provide a basis for equitable risk allocation.
• To improve PPP sustainability, the document recommends systemic master planning (clustering projects), using project finance analysis alongside cost-benefit analysis, and adopting procurement methods like the EU's 'most economically advantageous tender' instead of focusing on the lowest bid.

APA

International Institute for Sustainable Development (2018). Public Private Partnerships – Can They Deliver Better Value for Money? https://www.iisd.org/articles/policy-analysis/public-private-partnerships-can-they-deliver-better-value-money

Chicago

International Institute for Sustainable Development. Public Private Partnerships – Can They Deliver Better Value for Money? 2018. https://www.iisd.org/articles/policy-analysis/public-private-partnerships-can-they-deliver-better-value-money.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=Public Private Partnerships – Can They Deliver Better Value for Money? |date=9 April 2018 |url=https://www.iisd.org/articles/policy-analysis/public-private-partnerships-can-they-deliver-better-value-money |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2018public, author = {{International Institute for Sustainable Development}}, title = {{Public Private Partnerships – Can They Deliver Better Value for Money?}}, institution = {International Institute for Sustainable Development}, year = {2018}, month = apr, url = {https://www.iisd.org/articles/policy-analysis/public-private-partnerships-can-they-deliver-better-value-money}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }