4.5 Other Relevant Issues

Tax - A PPP generates more tax revenues than public procurement: there are long-term revenues from the Provider's equity investors and lenders. Although they may not benefit the Promoter directly, and may be difficult to quantify, these extra tax revenues can be set against payments by the Promoter when evaluating net cost to the public sector.

Innovation in design and operation of a project - The Promoter defines a specified output, but it is normally the Provider who determines how it is delivered. It was probably too early to find evidence of innovation in operation of the projects evaluated, although on an education project a number of O&M developments had been introduced which might have a wider impact on how educational infrastructure is managed. However, there is no obvious medium through which these benefits might be disseminated.

Introduction of private-sector management and implementation skills to the public sector, e.g. in areas such as keeping projects to schedule, or better service quality in operations. No evidence was found to support this, and it is possible that the use of PPPs may result in a transfer of technical skills from the public sector to the private sector.

The external discipline imposed by lenders. In several of the projects evaluated, both Promoter and Provider agreed that intervention by the lenders, including the EIB, in the PPP Contract and subcontract negotiation processes produced a better deal.

Joint public-PPP projects - For a rail transport project evaluated in-depth, the Promoter is constructing the infrastructure to which the Provider's works will be added. Balancing the demands of the public sector and PPP sides of the same project have become a major issue for the Promoter.