Evidence taken by the Committee in Ireland, France, Belgium, The Netherlands and British Columbia highlighted the following issues in relation to PPP projects undertaken in their respective countries:
• there was great diversity in the way the PPP model has been used in each country;
• the PPP arrangement has been mainly used for complex economic projects such as toll roads, bridges, tunnels; railways; water facilities. Some social projects have been undertaken for example with schools in the Republic of Ireland149 and housing in The Netherlands;
• some projects have failed and changes to policy and procedures have been made in light of these experiences;
• there needs to be transparent accountability procedures and regard for the public interest to overcome the considerable public scepticism about PPPs;150
• PPP deals are very costly to negotiate and these costs need to be factored into the assessment;
• competition is essential if value for money for money is to be achieved. Where only one bid has been received, government needs to reconsider whether the project is suitable as a PPP arrangement;
• PPPs are complex in structure and governments need to invest in developing the core skills and capacity required to support these complex procurements in departmental areas;
• need to improve the basis for calculating the public sector comparator, if the PSC is to be retained;
• PPP arrangements represent only a small part of governments' infrastructure acquisition. They are too complex and costly for small projects;
• most jurisdictions had a central or a number of Centres of Expertise to provide support to individual government departments;
• the additional costs associated with private finance must either be justified by risks transferred to the private sector or be offset through innovative proposals;
• based on experience, some jurisdictions, for example Canada, have built a number of additional safeguards into some projects, for example regulating maximum toll charges; building in prepayment rights (a right to buy out some or all of the private debt finance after a specified number of years); sharing any refinancing benefits, particularly post-construction; and gain sharing, for example from toll revenues; and
• in the Republic of Ireland, the trade union was supportive of PPPs provided they participate in the process and had an involvement in the development of the framework.151
Overall the experience had been mixed. It was generally agreed that PPPs offer a number of potential advantages but there are also a number of potential drawbacks. These issues are discussed in greater detail throughout this report.
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150 Overseas hearings
151 Overseas hearings, Mr P Keating, Assistant Secretary-General, IMPACT