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Hospital Healthcare Europe

Public sector blamed for most PPP problems


27 April, 2007  

Most issues in the construction of public/private partnership (PPP) projects arise because of the behaviour of the public sector, a survey of stakeholders in 22 countries has found.

Carried out by credit agency Standard & Poor’s, the survey identifies the public sector as the main culprit for any departure from expectations about the out-turn cost of works, their specification and schedule.

Such research makes grim reading for the UK Department of Health, which is responsible for approving PPPs such as local improvement finance trust (LIFTs) for the delivery of hospitals and health centres. “The most frequently reported causes of PPP construction distress in the survey were associated with the public sector itself,” said Standard & Poor’s credit analyst Robert Bain.
“These include inexperience, lack of commitment, lack of engagement, bureaucracy, interference, and associated scope changes and enforced delays.

The report warns that the large-scale and highly visible, essential public-service nature of most PPP projects makes them easy targets for factions with explicit or implicit political agendas that may be hostile to the concept of private-sector participation in public-sector infrastructure projects.