Long leases and anti-competition clauses in PPP contracts limit the scope of city planning and intervention to improve the public infrastructure and services. Competition clauses, common in toll road contracts, are designed to protect commercial interests by prohibiting any action that might adversely affect traffic on toll roads or the flow of fee paying service users. Compensation clauses similarly designed to constrain the future development of cities to protect the SPC shareholder interests and to restrict the public interest (Dannin, 2012).
PPPs increase the likelihood of increasing private sector monopoly control of the public infrastructure, for example, Transurban's strategy to consolidate ownership of Sydney's toll roads - see Part 1. Cities with PPPs covering a wider range of public infrastructure, combined with increased outsourcing of public services and/or transfer to arms length companies, are likely to face increasing conflict over the ownership and control of key infrastructure assets. The wider use of 'whole service' PPPs will deepen such conflicts. Some cities are well down the path of becoming 'contract cities' that are largely corporately operated and a far cry far the original US small town model of a contract city. The new model is likely to witness a much higher rate of PPP equity transactions than are evident in this report.
Little or no distinction is made between 'economic' and 'social' infrastructure, except when business interests wish to promote the PPP model. The continued erosion of public service principles and values in the structure and operation of PPPs has profound implications for all future of public goods and services.