‘softer’ alternative to the word ‘privatization’

enable private organizations to get a market share of public service provision.

It seems fair to say that a number of governments have tried to avoid using the terms “privatization” and “contracting out” in favor of speaking about partnerships

PPP ; definition:

a specific form of privatisation was developed to deal with limitations on public borrowing. This involved using a private company to borrow money, build a new hospital, school, road, etc, and then operate it over many years, recouping the investment and profit from payments

2 general Forms of PPP:

Claims and myths about PPPs:

evaluation

Evidence Note

1 Cost of Capital Interest + dividends

PPP moreexpensive

Private sector has to pay higher interest rates than government

2 Cost ofconstruction

PPP moreexpensive

Higher cost of ‘turnkey’ projects, offset by saving on cost of overruns

3 Cost of operation

Efficiency Neutral Empirical evidence suggests nosignificant difference

4 Transaction costs

Preparation &tendering

PPP moreexpensive

Costs of preparing contracts &tenders

5 Uncertainty Renegotiation &contingent liabilities

PPP more risky

Future renegotiations &changes

Framework for evaluating PPP proposals against public sector alternative