Abstract

Public-private partnerships (PPPs) are forms of cooperation between the public and private sector to supply the citizens with infrastructure and services which have traditionally been supplied by the public sector. PPPs are spreading all over the world. There is a growing pressure on the authorities to provide high quality services which are fundamental to the citizens' basic needs. PPPs may represent a funding alternative that can make the use of public resources more efficient. However, in many countries the true driving force behind PPPs is not the aim to increase efficiency but the ability to bypass state expenditure controls and to move public investment off the state budget and debts off the government balance sheet.

Proper design and transparent reporting are the key elements for successful PPP projects. The roots of the present failures - where the disadvantages overweigh the public benefits - are the lack of practice, too complicated and unbalanced legislation, improper preparation, and unrealistic assumptions on affordability and income growth. In some cases corruption also might play a role.

Lessons have to be learned to avoid the traps which led in many countries to projects that are neither cost-effective nor efficient and do not help to move the debts off the government balance sheet either.