Chapter 1: PPPs in regulation
Public–private partnerships/Private Finance Initiatives (PPPs/PFIs) bring together public and private actors, state and market logics to provide public infrastructures and services to individual users who rely on them for their economic and social lives, as well as their physical integrity. PPPs/PFIs represent investments in expensive public projects: for instance, the Greater Manchester Waste PFI amounted to £3.8bn and the London Underground PPPs (LU PPPs) to £17bn. These investments have to be compared with the £720bn that the British government expected to have as overall total public expenditure for 2013–14. Of course, the Greater Manchester Waste PFI and the LU were exceptionally large PFIs and the figures mentioned here related to their whole expected duration, namely thirty years. Yet such large investments in PFIs involve high financial risks. LU PPPs were transferred back into public ownership after Metronet failed in 2007 and Tube Lines negotiated its exit out of the PPP in 2010. Seven NHS PFI hospitals were struggling financially in 2012. The Department of Health wiped off the £65m debt of the South London Health Trust, a large part of which was due to its PFI. These cases illustrate the effects of relying on PPPs/PFIs to develop critical public projects such as hospitals, schools, highways, waste treatment plants or prisons. The developing, maintaining and terminating of PPPs/PFIs involves coordinating public, private and individual interests over time.
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