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Effects of a Lack of Support for Public Private Partnerships : the Swedish Case.

Widén, Kristian LU and Olander, Stefan LU (2010) Proceedings of the 6th International Conference on Innovation in Architecture, Engineering & Construction (AEC) In [Host publication title missing] p.668-676
Abstract
Sweden is part of a small European minority in the perceived societal gain of PPP. After a pilot

PPP project in late 1990’s no additional project has been started in Sweden. Although there is

interest from both public infrastructure clients and construction companies the national

government has very clearly stated that infrastructure projects should be procured in a traditional

way where all funding should come from the national budget. The purpose of this paper is to

discuss how a lack of support for governmental interests in PPP solutions affect the innovative

climate of infrastructure investments. Broadly defined, PPP solutions are arrangements where the

public sector... (More)
Sweden is part of a small European minority in the perceived societal gain of PPP. After a pilot

PPP project in late 1990’s no additional project has been started in Sweden. Although there is

interest from both public infrastructure clients and construction companies the national

government has very clearly stated that infrastructure projects should be procured in a traditional

way where all funding should come from the national budget. The purpose of this paper is to

discuss how a lack of support for governmental interests in PPP solutions affect the innovative

climate of infrastructure investments. Broadly defined, PPP solutions are arrangements where the

public sector together with a private partner engages in a long-term co-operation to solve a public

need. The opponents in Sweden base their arguments on the viewpoint that it if the state cannot

finance a well needed infrastructure project within the national budget there is no need for a

private initiative since the state can borrow funds on better terms than a private actor. However,

the proponents see PPP as way of not only financing well needed project but also as a way of

improving the innovative climate of the infrastructure sector. In short, the opponents only see PPP

as an alternative way of financing public projects while the proponents see PPP as a opportunity

to improve performance of infrastructure facilities by long-term partnerships and incentives to

adopt new and innovative solutions in construction and maintenance. The study presented here

shows that the main effects of a lack of PPP solutions is the following: First, the time from an

identified need until finished project becomes very long since each project needs to fit in the

yearly national budget. Secondly, when national funds are insufficient, well needed infrastructure

projects are delayed in the planning process often with no definite new time plan, and very rarely

does the government borrow additional funds. Thirdly, there is a tendency to divide large

infrastructure facilities in smaller entities in order to fit them in the national budget, which has the

effect that the full benefits of the investment are delayed. Finally, and maybe most importantly,

the Swedish government’s reluctance to adopt PPP solutions and to finance infrastructure projects

in small entities, promotes traditional design and build contracts with very small incentives for

adopting new innovative solutions to improve the construction process. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Chapter in Book/Report/Conference proceeding
publication status
published
subject
keywords
Innovation, Lack of Support, PPP
in
[Host publication title missing]
editor
Anumba, C.J.; Bouchlaghem, N.M.; Messner, J.I. and Parfitt, M.K.
pages
668 - 676
publisher
Department of Civil and Building Engineering, Loughborough University
conference name
Proceedings of the 6th International Conference on Innovation in Architecture, Engineering & Construction (AEC)
ISBN
978-1-897911-35-8
language
English
LU publication?
yes
id
7e4cf00d-c0c3-4da2-ac00-c77766d75ff0 (old id 1627232)
date added to LUP
2010-07-05 14:36:03
date last changed
2016-04-16 08:21:48
@inproceedings{7e4cf00d-c0c3-4da2-ac00-c77766d75ff0,
  abstract     = {Sweden is part of a small European minority in the perceived societal gain of PPP. After a pilot<br/><br>
PPP project in late 1990’s no additional project has been started in Sweden. Although there is<br/><br>
interest from both public infrastructure clients and construction companies the national<br/><br>
government has very clearly stated that infrastructure projects should be procured in a traditional<br/><br>
way where all funding should come from the national budget. The purpose of this paper is to<br/><br>
discuss how a lack of support for governmental interests in PPP solutions affect the innovative<br/><br>
climate of infrastructure investments. Broadly defined, PPP solutions are arrangements where the<br/><br>
public sector together with a private partner engages in a long-term co-operation to solve a public<br/><br>
need. The opponents in Sweden base their arguments on the viewpoint that it if the state cannot<br/><br>
finance a well needed infrastructure project within the national budget there is no need for a<br/><br>
private initiative since the state can borrow funds on better terms than a private actor. However,<br/><br>
the proponents see PPP as way of not only financing well needed project but also as a way of<br/><br>
improving the innovative climate of the infrastructure sector. In short, the opponents only see PPP<br/><br>
as an alternative way of financing public projects while the proponents see PPP as a opportunity<br/><br>
to improve performance of infrastructure facilities by long-term partnerships and incentives to<br/><br>
adopt new and innovative solutions in construction and maintenance. The study presented here<br/><br>
shows that the main effects of a lack of PPP solutions is the following: First, the time from an<br/><br>
identified need until finished project becomes very long since each project needs to fit in the<br/><br>
yearly national budget. Secondly, when national funds are insufficient, well needed infrastructure<br/><br>
projects are delayed in the planning process often with no definite new time plan, and very rarely<br/><br>
does the government borrow additional funds. Thirdly, there is a tendency to divide large<br/><br>
infrastructure facilities in smaller entities in order to fit them in the national budget, which has the<br/><br>
effect that the full benefits of the investment are delayed. Finally, and maybe most importantly,<br/><br>
the Swedish government’s reluctance to adopt PPP solutions and to finance infrastructure projects<br/><br>
in small entities, promotes traditional design and build contracts with very small incentives for<br/><br>
adopting new innovative solutions to improve the construction process.},
  author       = {Widén, Kristian and Olander, Stefan},
  booktitle    = {[Host publication title missing]},
  editor       = {Anumba, C.J. and Bouchlaghem, N.M. and Messner, J.I. and Parfitt, M.K.},
  isbn         = {978-1-897911-35-8},
  keyword      = {Innovation,Lack of Support,PPP},
  language     = {eng},
  pages        = {668--676},
  publisher    = {Department of Civil and Building Engineering, Loughborough University},
  title        = {Effects of a Lack of Support for Public Private Partnerships : the Swedish Case.},
  year         = {2010},
}