Part 2
Theory of contracts and PPPs
More Information
Neoliberalism and the state-business partnership: the PFI/PPP model
Incomplete and complex contracts
Cause and effect
Fundamental flaws in the PFI/PPP model
Risk transfer is costly and exaggerated
Affordability - high costs pressurise provision of core services
Value for Money is contested and rarely established
State subsidies/guarantees: corporate welfare required
Lower cost of public investment option ignored
Construction performance
Private finance means public debt
High transaction costs
Growth of secondary market trading and offshore infrastructure funds
Privatising the development process with the loss of public sector capability
High cost of abandoned, buyout, bailout, terminated and major problem contracts
Erosion of democratic accountability and transparency
Contracts are poorly monitored and rarely reviewed
Decline in jobs, terms and conditions
Loss of flexibility in use of buildings and service provision
Local economic, social and equality impacts
Environmental sustainability
Private investment interests increasingly dominate public infrastructure