PPP- (17.11.02)

Public Private Partnerships have reached the make-or-break point. Despite the com[paints from trade unions that PPP represented creeping privatisation (which in fact best value approach in local government is closer to doing), delivery of much needed public capital investment being delivered. However many of the firms involved in PPP deals with the government are now in financial trouble. Is this a sign that they have been squeezed too far and that the deals are unsustainable?

It seems more likely that PPP does deliver the right balance in risk and reward with the private sector. Financial troubles for these firms are more to do with the current economic climate than PPP on its own. Even firms in the same sectors that are not exposed to PPP projects are struggling. Strength of political willl to accept that the private sector cannot be pushed too far in making deals when there is a general recession on is important, but like with the rail industry threats that the government won't get deals in the future are usually over played.