Focus on Public Private Partnerships

In it’s summer The Art of Risk Management masterclass on the 10th of June 2010 in Brussels, PRIMO reflected on partnership risk. This is seen as one of the main risks by public entities, according the Risk Survey that Marsh and PRIMO Europe conducted last year. The survey shows that 59% of participants rate partnership risk significant – a similar amount as for public liability and business continuity risks.

All over Europe, unsuccessful projects have increased by the downturn. As a result the number of transactions and the total value has gone down. The companies bidding for projects now find it difficult to raise the capital and finance to carry them out, and public entities have their own problems in this regard, as the institutions funding their debt are running into trouble. These issues will all have impact on the time it takes for a project to reach its financial close and will increase partnership risk, whatever the contractual arrangement.

There is a strong push though from different governments around the world for PPP Projects. The European Union is developing instruments to stimulate private investors and governments to invest in PPP. Governments in the European region pushing PPP as a stimulus package tool are for example Spain, Italy, The Netherlands, Ireland and Germany after recent elections.

The round table will be focussed on new emerging risks, due to the financial and economic crisis. It seem logic to re-audit or re-check on the risks from government perspective, due to the fact that many of the commercial stakeholders and of course government budget are heavily influenced by the crisis. What to do next to stay in control?

Read the PRIMO Europe/Marsh article based on the Risk Report.