Warning message

Please note that this page is from our archives. There may be more up-to-date content about this topic on our website. Use our search engine to find out.

A new study from the University of British Columbia’s Sauder School of Business concludes that “the reality that ‘there are no free lunches’ applies to P3s as much as it does to anything else.”

The study analyzed 10 Canadian P3s from a variety of sectors. The research report found that “the potential benefits of P3s are often outweighed by high contracting costs and opportunism.” Despite the P3 sales pitch, the reality is that governments “have not been particularly successful at shifting risk to private sector partners.” So it’s no surprise that “contract negotiations associated with attempts to shift risk were extremely costly.”

The study highlighted the private sector’s reluctance to bear financial risk, suggests that “in infrastructure projects it rarely makes sense to try to transfer large amounts of use risk to the private sector,” and advises limiting the scope of future P3 contracts.