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Two new studies document the failure of European P3s, and the problems with water privatization.

In late March, the European Federation of Public Service Unions released a report on P3s titled More public rescues for more private finance failures. The report, released as the European Parliament debates how governments should purchase goods and services, is a warning against further EU procurement policies that favour P3s.

Among its findings:

  • The business case for P3s is biased and weak
  • P3s do not supplement public spending – they eat up public funds
  • Stories of failed P3s in Britain, as well as Central and Eastern Europe
  • Borrowing rates remain high for corporations

The European push is part of a broader P3 lobby from international institutions including the United Nations Economic Commission, the World Bank and others. These same, publicly-financed, institutions are propping up P3s with loans, guarantees and subsidies

The most obvious strategy for governments and the European Union would be to take this opportunity of winding down P3s as a failed and dangerous model, and return to conventional public investment and operation of infrastructure and public services,” said David Hall, director of the Public Services International Research Unit  (PSIRU) and author of the report.

Another PSIRU report, released in January, looks at current trends in the water and wastewater sector, documents problems with several privatized water contracts, and analyzes a number of cancelled or renegotiated contracts.

Replacing failed private water contracts was written for a seminar in Jarkarta, Indonesia. The city’s water was privatized in 1997 as one of the final acts of President Suharto.