Jul 15
Gordon Campbell has an excellent analysis of this idealogical burp in the Herald from Deloitte coporate finance partner Paul Carrow.
PPPs just have to cost more because of:
- the increased up front legal costs of contracting the risk of failure
- the costs of private firms having to borrow funds instead of the government borrowing at the cheapest interest rates available
- the costs of ensuring a profit for the private partner
- etc
And the risk still ultimately falls back on the taxpayer if essential services collapse because the contracts weren’t drafted with enough profit for the private operator. Its all a crock designed to make money for the extra layer of PPP consultants, banks and lawyers.
