The Worldwide Revolution in Infrastructure Provision and Project Finance
Chapter 4: Partnerships and Conventional Procurement of Infrastructure
INTRODUCTION In this chapter, procurement by means of a PPP is compared with that by conventional means in terms of the steps involved, procedures followed, and overall procurement performance. Before doing so, it is perhaps worthwhile restating and reiterating some of the factors that have led to PPPs being employed for infrastructure projects. The previous chapter traced the changing involvement of the private sector in infrastructure investment in Britain, the United States and France. In all three countries, and in others as well, the dominant public sector role in producing, delivering and financing infrastructure services, which held sway for most of the twentieth century, has given way in recent years to experimentation with a variety of means of engaging private sector resources for infrastructure. Part of this regeneration of interest in private sector participation must be seen as a continuation and extension of public sector reforms, which have seen the commercialism of many activities previously regarded as state monopolies. But this is not the only factor. Much of the revival can be attributed to dissatisfaction with traditional methods of public procurement of infrastructure. Infrastructure policies after World War II had been driven by a faith that governments could succeed where markets appeared to fail, in the words of the World Bank, but the reality proved to be different. Public sector infrastructure projects in many parts of the world were marked by inefficiency, unreliability and poor fiscal control (World Bank, 1994). This performance, indifferent at best, led to the growth of...
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