Public-Private Partnerships

Prisons, parks, and public transport: the child-projects of public-private partnerships.

Public-private partnerships provide pretty projects to the public via private processing. That’s not only a speech enunciation tool, but a true sentence. Public-private partnerships are a way governments can work with private companies to make big dreams happen.

Private companies have what governments wish they did: more efficiency, more expertise, and more money. Most all private-public partnerships take advantage of the first two factors, and sometimes all three.

While efficiency and expertise are nice to have, money is most often the hurdle to getting projects started and completed. To get around this, governments can work (somewhat ethically) with private firms to pay the upfront costs and construct the project. The government will then pay back the firm slowly over time...with interest. Basically, the government contracts the firm to do the work, and says IOU with a loan.

Sure, this gets stuff done. And politicians now can get credit, fame, and glory for projects being paid for by taxpayers well into the future. But there’s always a catch, isn’t there? (Note that it was our taxpayer money they spent to feather their political beds.)

For firms, the risks are the same as usual: things cost more than they initially thought, accidents, unhappy clients, the usual. For the government, it’s potentially higher-than-thought costs and more like...if a firm gets the government to pay it more than it should’ve. For example, public-private partnerships have been popular in Britain. Good for the projects, but often bad for taxpayers, since there has been the case where the British government overspends on the projects, padding the firm’s pockets with taxpayer money.