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Bankwatch CEE Launches New Site on Public-Private Partnerships

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The Bankwatch Network for Central and Eastern Europe (CEE Bankwatch) launched a new website with critical analyses of use of public-private partnerships (PPPs) in development of public infrastructure – to build new roads, hospitals and for communal infrastructure.

10 things you weren't supposed to know about PPPs10 things you weren't supposed to know about PPPs

Croatian environmental association Zelena akcija (Green Action), CEE Bankwatch member, announces that the site offers case studies of problematic PPP projects all over Europe, including Croatia, noting the examples of water purification and processing plant in Zagreb, the Zagreb Arena, and Bina-Istria and Zagreb-Macelj motorways.

“Some governments support PPPs because of the fact that they allow them to start expensive infrastructural projects now, without showing the debt in official balance sheets. Furthermore, the payment of the debt is postponed for a number of years”, says Roman Havlicek, Bankwatch Coordinator for Alternative Economy.

Havlicek warns that all governments that plan to enter new PPP projects should bear to mind the negative consequences of similar projects in Hungary, Portugal and Great Britain. There, the governments, after the start of the financial crisis, faced a situation in which the numerous agreements they signed left them with the obligation to pay significant amounts to private infoestors over the next 20 years or so, which rendered them unable to manage their own funds.

Havlicek adds that those states are now reviewing their position on PPP model, in view of the fact that existing projects have burdened them with more financial obligations towards the private partners than initially envisioned.

“There is growing body of evidence that PPPs are overestimated. However, since existing agreements cover periods of at least 30 years, a strong political will is needed to change the situation. When PPPs fail – which happened in too many cases – the bill is presented to the tax-payers to cover”, adds Pippa Gallop, Bankwatch Research Coordinator.

Sven Haertig, internet editor at Bankwatch, expressed his hopes that the wibsite, intended primarily for activists, journalists and researchers, will help demystify the issue of public-private partnerships and contribute to greater understanding of their functioning. (Source: Zelena akcija/Zamirzine)

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