UK government’s own watchdog says that long-term PPP infrastructure solutions waste billion of taxpayers money!

Following the liquidation of Carillion, the UK’s National Audit Office, (NAO) the government’s watchdog has stated that the public sector has wasted billions of taxpayers’ money on projects where the private sector is awarded long-term concessions to build, finance and operate schools, hospitals, motorway, military bases, prisons, etc.

The report outlines the total liabilities to be paid over the next 40 years to the private sector and calculates the excess costs as best as possible.

The NAO even mentions a school in Liverpool City where the city is due to pay a further €50 million in fees, even though the school cost only €26 million to build. It was closed down after 12 years because of poor teaching standards. This is a typical example of a totally lunatic situation.

The full report is long and complex but the conclusions are extremely clear – the government and other public sector bodies have wasted huge sums of taxpayers’ money. The claimed benefits have not been seen and layers and outside consultants have to be used to deal with the failures that are now being realised. The costs of these “advisors” is extreme and adds hundreds of millions of new expenses, in add-on to delays, liquidation and cancellation costs.

Several important matters arise from this report:

  1. Why is the Finnish government still looking at these solutions for motorways, schools and hospitals? If the Brits cannot manage these complex deals then do you really believe that Sipilä and Orpo have the capacity and skills to win the day against Skanska, NCC, the big law firms and the likes of PWC, KPMG and EY, the main proponents of these dirty deals.
  2. Why is the European Investment Bank so keen on these projects – the answer is obvious – they make a lot of money from their shareholders to wine and dine in luxurious offices in, guess where, Luxembourg!

In business they say “Caveat Emptor” – let the buyer beware – the reality is that PPP’s (elinkaarimalli in Finnish) are really dangerous so if voting for the wrong party can be a costly mistake!

The full NOA report is here on this link.

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