The visible hand in economics

PPPs? Yes, please…..maybe

Posted on: November 26, 2008

The Standard don’t see the point in them and Fletcher Building would  rather have a standard construction contract that doesn’t transfer  risk to them and doesn’t require them to incur costs setting the arrangement up.

I’m FAR from an expert on the issue of PPPs, and there may be some valid concerns using them for roads in New Zealand. However it is important to recognize that PPPs can take many forms with different levels and types of risk shared between the two parties. One of the key purposes of a PPP is to let the party that can best manage  each source of risk bear it. if designed properly this doesn’t sound like a bad idea, if they aren’t designed properly it’s a bad idea!

Anyways, sorry I can’t provide more definitive commentary about this, if anyone wants to learn more about PPPs and there purpose/benefits I recommend checking out this report from Deloitte. It’s a couple years old now and I haven’t read it in a while so can’t really comment on its contents, but I remember it being a good coverage:)

1 Response to "PPPs? Yes, please…..maybe"

Beyond the investment incentives, I always thought of PPP’s as providing a good way of getting market pricing going on when we are working with an asset that the government “wants to hold” for some arbitrary reason.

I definitely don’t think that we should rule them out just because they involve private companies😛

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