Highlighting recent economic studies and developments
UK P3s bought out, bailed out or gone bust
The birthplace of P3s is the subject of a new report documenting the failures of these privatization schemes. Research from the European Services Strategy Unit (ESSU) identifies 74 Private Finance Initiative (PFI) projects that public bodies have bought out, bailed out or terminated – or that have other major problems.
The cost to the public so far: nearly $12.5 billion. And that’s not counting the high costs of negotiating PFI contracts, plus expensive private financing. Factor in those costs and the estimated price tag balloons to nearly $46 billion.
The majority of failed projects were in health, transit, housing, IT services or education, with most of the projects located in England.
ESSU researcher Dexter Whitfield’s report identifies the many fundamental flaws in PFI/P3 privatization. His recommendations include terminating the entire PFI program and instead increasing direct public infrastructure investment
The public cost of the UK’s entire PFI program is pegged at nearly $490 billion.
Pension funds in better financial health
The birthplace of P3s is the subject of a new report documenting the failures of these privatization schemes. Research from the European Services Strategy Unit (ESSU) identifies 74 Private Finance Initiative (PFI) projects that public bodies have bought out, bailed out or terminated – or that have other major problems.
The cost to the public so far: nearly $12.5 billion. And that’s not counting the high costs of negotiating PFIcontracts, plus expensive private financing. Factor in those costs and the estimated price tag balloons to nearly $46 billion.
The majority of failed projects were in health, transit, housing, IT services or education, with most of the projects located in England.
ESSU researcher Dexter Whitfield’s report identifies the many fundamental flaws in PFI/P3 privatization. His recommendations include terminating the entire PFI program and instead increasing direct public infrastructure investment
The public cost of the UK’s entire PFI program is pegged at nearly $490 billion.
Privatization damages the economy
Privatization and selling off public assets damages the economy because it leads to private monopolies that hurt productivity and jack up prices. That’s what Australia’s consumer and competition watchdog now believes after being a proponent of privatization for decades.
Rod Sims, chair of the Australian Competition and Consumer Commission, told an economic forum he’d been a proponent of privatization for 30 years but now says “it’s severely damaging our economy,” is being done by governments to receive short-term proceeds and is leading to slower productivity as the resulting private monopolies significantly increase prices for consumers and businesses.
Canadian policymakers should pay close attention. Some governments here are taking a page from Australia’s privatization playbook. Privatization has meant higher electricity prices in Ontario – and we could see a lot more privatization and increases in prices and user fees if the federal infrastructure bank becomes a “bank for privatization.”