Case Studies

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 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).

Private water concessions in France have been increasingly challenged, resulting in the re-municipalisation of the water supply in several cities, including Paris.

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.

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.