Public-private partnerships: The global debt iceberg ? - article profiled in PSI Privatisation Watch !!!

Article SUMMARY - 

• Research suggests PPPs are the most expensive way for governments to invest in infrastructure
• PPPs are more expensive because private sector borrowing costs more, private contractors demand a significant profit
• PPP contracts often do not allow the public to see the full terms, including contracted costs and liabilities

 " According to the World Bank public-private partnerships (PPPs), a catch-all term used widely to indicate investments involving both the public and private sectors, are now responsible for 15-20 per cent of infrastructure investment in developing countries.

PPPs are usually contracts where the public sector provides guarantees to the private sector, often meaning that the private sector can make profits whilst risk remains with the public. Many of these guarantees create real costs for the public sector from the start of the contract, such as agreeing to pay a certain annual amount for a hospital. Other costs will be contingent liabilities, where the government guarantees payments if revenues do not meet a certain level, for instance by a government topping up payments to an electricity producer if revenues have not met the contracted amount or if a debt is defaulted on."

Read the full article and pass on the link
http://www.brettonwoodsproject.org/2016/06/21111/?utm_source=emailmarketing&utm_medium=email&utm_campaign=observer_summer_2016&utm_content=2016-07-02_1640