Between 1997 and the end of 2010 in England, 102 health sector PPP contracts (or PFI - private finance initiative) were signed compared with just 35 publicly funded health capital investment projects. Another 45 health sector PPP contracts were signed in Northern Ireland, Scotland and Wales during the same period.
The London underground PPP has been criticised already at an early stage for its high costs and high profits for the private partners. In the end, the PPP was ended when the consortiums were bought by London's public transport company.
The controversy about the D1 motorway came from two angles: first, as a PPP its critics said it was overpriced, and second, the project promoter decided not to follow the route recommended through the Environmental Impact Assessment process, instead choosing one that would impact on protected Natura 2000 areas.
The M25 widening scheme has faced a barrage of criticism due to its higher than necessary costs and failure to properly assess the alternative option of using the hard shoulder as an extra lane during peak hours. The UK House of Commons Public Accounts Committee has estimated that the potential extra cost to the taxpayer has amounted to around GBP 1 billion (EUR 1.2 billion).
The EBRD-financed Zagreb Wastewater Treatment Plant, which opened in phases between 2004 and 2007, was intended to improve water quality in the River Sava. No-one disputed that some wastewater treatment was needed in the city, but the project which was developed has brought more questions than answers and cost Zagreb’s residents dearly.
Private water concessions in France have been increasingly challenged, resulting in the re-municipalisation of the water supply in several cities, including Paris.
In spite of heavy support from the European Bank for Reconstruction and Development (see box), which claims to improve corporate governance and raise standards in the projects in which it participates, in 2009, the most recent year for which figures could be found, water losses were still at 58 percent and most people in Sofia consider the water undrinkable.
Some of the best-known examples of failed PPPs in CEE are the M1/M15 and M5 motorways in Hungary. These were among the rare cases when significant demand risk really was transferred to the private sector concessionaires, but as a result the M1/M15 ended up being fully renationalised and the M5 partially renationalised, thus showing that ultimately the public sector in any case bears the risk as it cannot afford for the service to be halted.
Negotiated with single bidders, the two PPP concession contracts are unlikely to offer value for money. The lack of reviews however make it difficult to confirm this.
Budapest had no concert halls of international standards, and primarily due to a lack of state resources it was decided to implement this project as a PPP. Neither prior to nor after the signing of the contract was any impact study (including economic calculations) carried out. No cost analysis was carried out either. As a result, the details of the investment have been continually changing.
Arena Zagreb is the largest sports hall in Croatia, with a gross area of 90 500 square metres. It was opened in the beginning of 2009, and already in July 2009 the company had accumulated debt of EUR 600 000. To cover the yearly costs of loans, Arena Zagreb has to be occupied for 212 days per year, which turns out to be impossible.
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