Before embracing PPPs, politicians and administrators in Canada should heed the British experience. In the early 1990s, Britains Conservative government introduced its Private Finance Initiative (PFI), the equivalent of PPPs. Under PFI, the private sector has been given the right of first refusal on many major projects in the public sector.
Despite this government support, the PFI has not been successful. Private investors continue to press for more and more government subsidies and guarantees. The corporations want a virtually risk-free environment for the PFI.
But more importantly, the PFI has not delivered the goods, or the services, to the British people. PFI has failed in its promises to deliver better, cheaper services and infrastructure.
According to the Public Services Privatization Unit in Britain:
- PFI costs more and the costs continue to escalate.
- Very few PFI contracts have been signed.
- PFI has caused delays that have jeopardized projects.
- The public has borne the risks of projects as the government has steadily introduced more protection for the private contractor.
- PFI has distorted priorities for projects and resources.
- Projects are rewarded without considering whether they could be done more cheaply by the public sector.
- Given the size of PFI schemes, only the largest companies have been able to bid, restricting competition.