Effects of a Lack of Support for Public Private Partnerships : the Swedish Case.

• Sweden is part of a small European minority in the perceived societal gain of PPP. After a pilot PPP project in late 1990’s no additional project has been started in Sweden. Although there is interest from both public infrastructure clients and construction companies the national government has very clearly stated that infrastructure projects should be procured in a traditional way where all funding should come from the national budget. The purpose of this paper is to discuss how a lack of support for governmental interests in PPP solutions affect the innovative climate of infrastructure investments. Broadly defined, PPP solutions are arrangements where the public sector together with a private partner engages in a long-term co-operation to solve a public need. The opponents in Sweden base their arguments on the viewpoint that it if the state cannot finance a well needed infrastructure project within the national budget there is no need for a private initiative since the state can borrow funds on better terms than a private actor. However, the proponents see PPP as way of not only financing well needed project but also as a way of improving the innovative climate of the infrastructure sector. In short, the opponents only see PPP as an alternative way of financing public projects while the proponents see PPP as a opportunity to improve performance of infrastructure facilities by long-term partnerships and incentives to adopt new and innovative solutions in construction and maintenance. The study presented here shows that the main effects of a lack of PPP solutions is the following: First, the time from an identified need until finished project becomes very long since each project needs to fit in the yearly national budget. Secondly, when national funds are insufficient, well needed infrastructure projects are delayed in the planning process often with no definite new time plan, and very rarely does the government borrow additional funds. Thirdly, there is a tendency to divide large infrastructure facilities in smaller entities in order to fit them in the national budget, which has the effect that the full benefits of the investment are delayed. Finally, and maybe most importantly, the Swedish government’s reluctance to adopt PPP solutions and to finance infrastructure projects in small entities, promotes traditional design and build contracts with very small incentives for adopting new innovative solutions to improve the construction process.

Subject headings

TEKNIK OCH TEKNOLOGIER  -- Samhällsbyggnadsteknik -- Byggproduktion (hsv//swe)

ENGINEERING AND TECHNOLOGY  -- Civil Engineering -- Construction Management (hsv//eng)

Keyword

Innovation

Lack of Support

PPP

Innovation

Publication and Content Type

kon (subject category)

ref (subject category)