Globally, there is extensive experience with PPPs. One source identifies 1,109 such projects valued at $509 billion launched in the period from 1985 to 2007.4 PPPs are most heavily concentrated in Europe, and to a lesser extent Asia. Europe accounts for fully 43 percent of the projects and nearly half of their dollar value. Within Europe, Great Britain is the dominant player; it accounts for 193 (40 percent) of the 477 European projects.
| Table 1 Number and Value of PPPs Underway or Completed by Sector and Region, 1985-2007 | ||||||
| Number of PPPs by Sector and Region | ||||||
| Sector | Africa & the Middle East | Asia and Australia | Europe | Latin America & the Caribbean | North America | Total |
| Roads and Bridges | 11 | 114 | 156 | 69 | 40 | 390 |
| Water/Wastewater | 20 | 72 | 89 | 38 | 71 | 290 |
| Building | 2 | 16 | 162 | 5 | 54 | 239 |
| Rail | 4 | 20 | 36 | 13 | 7 | 80 |
| Seaport | 2 | 22 | 20 | 10 | 2 | 56 |
| Airport | 0 | 24 | 14 | 9 | 7 | 54 |
| Total Number | 39 | 268 | 477 | 144 | 181 | 1,109 |
| Percentage | 4% | 24% | 43% | 13% | 16% | 100% |
| Value of PPPs by Sector and Region (US dollars in billions) | ||||||
| Sector | Africa & the Middle East | Asia and Australia | Europe | Latin America & the Caribbean | North America | Total |
| Roads and Bridges | $5.3 | $37.0 | $121.2 | $28.4 | $40.5 | $232.4 |
| Rail | $4.7 | $28.4 | $47.0 | $4.5 | $9.3 | $93.9 |
| Building | $0.0 | $3.6 | $53.6 | $0.3 | $7.1 | $64.7 |
| Water/Wastewater | $4.6 | $19.9 | $18.2 | $5.5 | $7.6 | $55.9 |
| Airport | $0.0 | $35.9 | $5.6 | $2.6 | $3.0 | $47.1 |
| Seaport | $0.2 | $10.4 | $2.6 | $0.9 | $0.6 | $14.6 |
| Total Value | $14.8 | $135.1 | $248.3 | $42.3 | $68.2 | $508.6 |
| Percentage | 3% | 27% | 49% | 8% | 13% | 100% |
| Note: CBC analysis of data excludes contracts characterized as DBs, asset sales, joint development agreements and management contracts. Table also excludes certain solid waste incineration projects involving long-term contracts between governments and private owners and operators. Source: International Public Works Database, October 2007 edition, from Public Works Financing. | ||||||
The large number of projects in Europe is related to historic patterns of public-private interactions, including the "corporatist" tradition in several nations, but it is also linked to the 1993 creation of the European Union (EU). Member nations of the EU are mandated to keep their public debt below 60 percent of GDP. This has created incentives for nations to finance large infrastructure investments in ways that avoid or reduce public borrowing, and PPPs provide such a mechanism. In Great Britain, the Labour government elected in 1997 expanded the use of "Private Finance Initiatives" (PFIs) to help meet a commitment to greatly enhance investment in public facilities while avoiding EU debt limits. As of March 2008, there were 628 PFI/PPP projects operational, accounting for £58.6 billion in investment.5 Similarly, a 2004 French ordinance opening up use of PPPs has resulted in projects worth €10 billion in progress.6
In all regions, PPP projects have been concentrated in transportation and water systems. Transportation projects of all types comprise 52 percent of the total projects and 76 percent of their dollar value. Roads are the most common type of transportation projects, but significant numbers of PPPs have been used for rail lines, airport facilities and seaports. Water system projects include individual wastewater treatment facilities, such the €1.5 billion Harnaschpolder wastewater treatment plant in the Netherlands, and more extensive water delivery projects employed in developing nations like China and Indonesia.
The large number of transportation and water projects is consistent with the notion that PPPs are linked to projects that generate substantial user fees. Road projects are often tolled, many transport facilities have user fees, such as landing fees and rents at airports, and water projects generate revenue from charges to customers. But, it is important to note that many PPPs have been structured without the private partner collecting user fees. In these cases, the private partner earns its profit from payments made directly from the public partner. These payments come in two forms: shadow tolls and availability payments.
Shadow tolls are similar to user fees, but are paid by the government rather than an individual customer. For example, rather than collecting tolls from drivers, the private partner in a bridge project may receive a payment from the government based on the volume of use at the bridge. Several highways in the United Kingdom and increasingly in Spain are being constructed and operated under such arrangements.
Availability payments are used for projects when volume of use is less critical and the government is seeking the availability of some facility such as a school building, military barracks or hospital. The government makes periodic payment contingent on the private partner making the facility available and keeping it in good condition. The amount of the availability payment is intended to cover the private partner's capital and operating costs with profit possible due to operating efficiencies. Such availability payments fund projects in the United Kingdom for hospitals, clinics, schools and other buildings, as well as some transport projects; in 2007, these payments totaled nearly £5 billion annually.7
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4 Data from International Major Projects Survey, October 2007 edition, published by Public Works Financing. CBC analysis of data excludes contracts characterized as DBs, asset sales, joint development agreements and management contracts. For most projects, values recorded in the database represent project capital costs as estimated in the year the contracts were signed, except for select entries updated by CBC.
5 HM Treasury. "Signed Projects List - March 2008." Available online at http://www.hm-treasury.gov.uk/documents/public_private_partnerships/ppp_pfi_stats.cfm.
6 Matthieu Desiderio. "Public Private Partnerships, French practices and evolutions." Transport Information Group. Accessed 4 September 2008. Available online at http://en.transport-expertise.org/index.php/2008/02/26/public- private-partnerships-french-practices-and-evolutions/.
7 In the United Kingdom, availability payments are referred to as "unitary charges." See HM Treasury, "Signed Projects List - March 2008." Available online at http://www.hm-treasury.gov.uk/ppp_pfi_stats.htm.