World Bank ‘must stop funding and promoting PPPs’

17 Apr 18

The World Bank should stop funding and promoting public private partnerships until a review of their effectiveness has been done, an NGO umbrella group has called for today.

The European Network on Debt and Development has said the financial institution, which provides loans around the world for capital projects, is not addressing concerns over PPPs.

It has today published an open letter, with 84 signatories from across three continents, addressed to World Bank executive directors suggesting that the bank has continued to “ignore evidence of [PPP’s] failures globally”.

The letter will be handed to the executive directors of the World Bank at their meeting with civil society organisations and trade unions today.

It has been signed by organisations including the Jubilee Debt Campaign, The Bretton Woods Project NGO and the Society for International Development.

In October 2017, more than 150 organisations signed up to Eurodad’s PPP global campaign manifesto to highlight concerns over the frequency with which public service projects were using PPPs.

Eurodad’s letter released today said: “Our combined evidence shows that the experience of PPPs has been negative, and few PPPs have delivered results in the public interest.”

Despite this Eurodad suggested that the World Bank is proceeding with a “private finance first” attitude to development finance, with PPPs favoured to finance infrastructure projects.

The letter has warned PPPs can lead to “precarious jobs”, which can lead to lower labour standards and an oversight of workers’ rights.

As well as a moratorium on funding and promoting PPPs until an independent review into the development outcomes of the banks’ PPP portfolio is completed, the letter also calls for a tool for the public to consult on a public versus private option for projects. 

It also called for a mandatory fiscal risk and human rights impact assessment for every PPP project the bank enters into.

Eurodad’s letter pointed to a UK National Audit Office report, which found that in some cases “PPP projects revealed costs around 40% higher than the costs of a project financed by government borrowing”.

The umbrella group used the example of the collapse of Carillion as a failure of PPP projects in the UK.

Tim Jones, policy officer from the Jubilee Debt Campaign, said: “PPPs have been an expensive failure in the UK.

“Yet the UK government and World Bank continue to promote them to other countries.”

He added: “The World Bank’s own evaluations have shown that the poverty and financial impacts of PPPs are rarely considered in the PPPs they have supported.

“At the least, the World Bank should ensure that independent and transparent evaluations of the fiscal impacts, value for money and impacts on human rights are conducted for all PPPs which they support.”

In March 2018, a European Court of Auditor’s report found PPPs had suffer from “widespread shortcomings” and “offer limited benefits”.

The World Bank has been contacted for comment.

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