Public Values

Public-Private Partnerships and Municipalities

Beyond principles: a brief overview of practices.

Pierre J Hamelby Pierre J Hamel, INRS, urbanization, culture et société

. . . P3s are not a cure-all or miracle treatment for all situations. They do not offer municipalities a magic solution to the real problem of financing infrastructure, the primary and often only real challenge facing local governments.

The problem of financing municipal infrastructure is not related to the availability of the needed funding, access to financial markets, debt ratings, or the cost of loans taken by municipalities. To make infrastructure investments, municipal governments can easily borrow almost al the funds they need at very favorable rates. Indeed, this fact is so clear, it is rarely challenged. To leave the responsibility of financing to the private partner is a poor solution to a non-existent problem, when traditional municipal financing is simple, relatively easy and, above all, much less costly than the private-sector equivalent. Nevertheless, the truth is that some people have in interest in making us think there is a problem, because they have a solution to sell.

In this respect, we would emphasize that in promoting P3s, one of the objectives pursued by government is to create new business opportunities for investors. . .

Links and sources
  Press release for Pierre J Hamel paper, August 31, 2007
  "Public-Private Partnerships and Municipalities", by Pierre J Hamel, INRS, urbanization, culture et société, 2007. Produced at the request of the FCM
  Federation of Canadian Municipalities

Posted: April 16, 2008

  Public services
  Voices of privatization

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