Strategies to improve value for money in financing public private partnerships

Extract: This paper explores strategies for improving the value for money to Government in the financing component of public private partnership (PPP) procurement for social infrastructure projects, drawing on the experience of methods trialled over the past five years in the United Kingdom and Australia. The primary purpose is to examine Credit Guarantee Financing (CGF) and the Supported Debt Model (SDM) which have been applied in the United Kingdom and Queensland respectively, with a view to discussing their relative strengths and weaknesses. The present uncertainty, shortages of capital and volatile pricing in world capital markets signals a diminished role for the private sector in the provision of economic and social infrastructure in the medium term. The CGF and SDM approaches suggest alternative methods that undoubtedly will come under closer examination by all governments in 2009.