An economic analysis of Ireland's first public private partnership

Abstract

In 1999, the Irish Government launched a programme of public private partnerships (PPPs). The programme has expanded rapidly as policy makers seek to address the country's acute deficit of physical infrastructure. The first PPP to reach the stage of operation is the contract for five secondary schools. The early evidence from this case demonstrates that the market for education projects is competitive. The contract was designed on the basis of securing an appropriate distribution of risk and limiting private sector rents from re-financing. However, the evidence indicates that this PPP has not resulted in significant innovations and the public sector has failed to provide any evidence of value for money. IntroductionThe 1990s have witnessed the emergence of public private partnerships (PPPs) as a key tool of public policy across the world. PPPs take different forms. Variants of the PPP model have been adopted for purposes such as investing in large-scale physical and social infrastructure and related services (for example, roads, schools and hospitals). Other variants of the PPP model have been adopted for the purpose of achieving wider public policy objectives such as combating social exclusion (for example, the Single Regeneration Budget in the UK).The current Irish Government has adopted an extensive programme of PPPs for the purpose of investment in infrastructure and public services. Since its introduction in June 1999, the proposed PPP programme has expanded rapidly. There are over 100 projects earmarked for investment using the PPP model and there are PPP projects at various stages of procurement in sectors such as roads, public transport, education and health.This paper presents an economic analysis of the first Irish PPP project to reach the stage where assets are built and services are in operation. It examines the rationale for and extent of Ireland's PPP programme. It reviews economic theories relevant to contracting models such as PPPs. Drawing from these theoretical perspectives it derives criteria for analysis of PPP contracts. It uses these criteria for the purpose of analysing the contract for the design, build, operation and finance of five schools in Ireland.

A critical assessment of a proposed public private partnership (PPP) for the management of water services in Lebanon

“…PPPs rather imply a sort of collaboration to pursue common goals, while leveraging joint resources and capitalizing on the respective competences and strengths of the public and private partners (Widdus, 2001;Pongsiri, 2002;Nijkamp et al, 2002). Hurst and Reeves (2004) describe a PPP as an agreement between the public sector and a private sector company to provide an asset or public service -traditionally provided by the public sector -by the private sector or jointly as part of a PPP project. The essence of PPPs is therefore the creation of added value because of the cooperation of public and private partners (Henderson and McGloin, 2004;Jamali, 2004).…”

Cross-sector humanitarian–business partnerships in managing humanitarian logistics: an empirical verification

“…In PPP's, the public sector delegates the provision of public services and certain associated risks to the private sector on a long-term basis (Meidutē and Paliulis 2011;Nisar 2007). The public services covered by PPP's include for example health services (Capoor 2005;Nelson et al 2007;Oyediran et al 2002;Ramani et al 2007), water services (Lee 2010), telecommunication and information (Bagchi and Paik 2001), transportation and logistics (Dormois, Pinson, and Reignier 2005;Estache et al 2009;Sharma 2009), urban and housing (Dormois, Pinson, and Reignier 2005), and education (Hannah 2008;Hurst and Reeves 2004). For the public sector, PPP's can help addressing issues of budget constraints and lack of expertise in development (Al-Shqairat et al 2014;Brinkerhoff and Brinkerhoff 2011;Jin, Zhang, and Yang 2012).…”

Placing Neoliberalism: The Rise and Fall of Ireland's Celtic Tiger

“…The rolling out of neoliberal mechanisms, such as privatisation and public -private partnerships, was rarely handled in any sort of ideologically informed or systematic manner, and the state often failed to achieve the appropriate balance between private sector risk and public sector reward in these projects (Hurst and Reeves, 2004;Kirby and Jacobson, 2006;Palcic and Reeves, 2005;Reeves, 2003). Despite the relatively small receipts yielded to the taxpayer by privatisation, the state has continued to roll out privatisation into diverse service areas such as school buses, refuse collection, motor-vehicle testing, and urban car parking and clamping, and to initiate public -private partnerships with respect to public buildings, social housing, and road infrastructure (Barrett, 2004).…”