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 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.
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.
| Original language | English |
|---|---|
| Title of host publication | [Host publication title missing] |
| Editors | C.J. Anumba, N.M. Bouchlaghem, J.I. Messner, M.K. Parfitt |
| Publisher | Department of Civil and Building Engineering, Loughborough University |
| Pages | 668-676 |
| ISBN (Print) | 978-1-897911-35-8 |
| Publication status | Published - 2010 |
| Event | Proceedings of the 6th International Conference on Innovation in Architecture, Engineering & Construction (AEC) - Penn State Duration: 0001 Jan 2 → … |
Conference
| Conference | Proceedings of the 6th International Conference on Innovation in Architecture, Engineering & Construction (AEC) |
|---|---|
| Period | 0001/01/02 → … |
Subject classification (UKÄ)
- Construction Management
Free keywords
- Innovation
- Lack of Support
- PPP
