It’s time to move away from public-private partnerships and build a future that is public
BY OCÉANE BLAVOT, RODOLFO BEJARANO AND MAE BUENAVENTURA
BRUSSELS/LIMA/MANILA: Last month, we joined more than 1,000 representatives from all sectors of civil society who came together in Santiago de Chile to debate the future of — and threats to — public services the world over.
Participants discussed the chronic underfunding which continues to drive economic inequality, injustice and austerity, and the neocolonial policies that maintain the status quo.
Today, those debates have resulted in the launch of “Our Future is Public: The Santiago Declaration for Public Services” — a momentous agreement signed by more than 200 organizations vowing to work to “transform our systems, valuing human rights and ecological sustainability over GDP (gross domestic product) growth and narrowly defined economic gains.”
One of the most damaging initiatives that has deeply affected the delivery of public services and infrastructure projects on all continents is the rise of public-private partnerships, or PPPs.
They have long been promoted by institutions such as the World Bank as a silver bullet to close the so-called gap to finance investments in services and infrastructure. The premise is that the private sector can deliver these services more efficiently and to a higher standard than the public sector despite extensive evidence to the contrary.
We lay the pitfalls of PPPs bare in our new report “History RePPPeated II: Why public-private partnerships are not the solution” — the second in a series of investigations documenting the impacts of PPPs across Africa, Asia, Latin America and Europe.
Launched at the Santiago conference with some of the partners responsible for investigating and authoring the case studies, the report not only highlights negative impacts of PPPs but sets out recommendations for how to better finance infrastructure and public services in the face of false solutions that have been proposed given the context of the current polycrisis.
These narratives wholly reflect red flags that are raised in the Santiago Declaration.
Through these investigations, we discovered failures on multiple levels in PPPs covering infrastructure such as roads and water supplies, as well as vital public services like health care and education.
From escalating costs for the stretched public sector to environmental and social impacts, we found time and again that communities had been ignored, displaced, and had their basic rights violated by thoughtless projects designed and implemented in the pursuit of profit.
A prime example is that of the Melamchi Water Supply Project (MWSP) in Nepal. First announced nearly a quarter of a century ago, the project’s aim was to deliver clean, reliable and affordable water to 1.5 million people in Kathmandu.
And yet, 24 years later, residents are still waiting, while communities at the Melamchi water source are facing scarcity of water and eroded livelihoods. Instead of safe, clean drinking water — an internationally recognized human right — they have witnessed an extraordinary revolving door of private companies and institutional funders, including the World Bank, who have each failed to deliver.
To add to the MWSP’s colossal failure, 80 hectares of farmland have been lost to the project, a heavy blow to local residents, and up to 80 households have been forcibly displaced due to construction.
Who owns and controls our resources and public services became even more vitally important with the outbreak of the Covid pandemic in March 2020. Market-based models cannot be relied upon to deliver on human rights or the fight against inequalities as they are accountable only to their shareholders and not to their users.
This resulting focus on profit is overwhelmingly apparent in our case study from Liberia. Here, US firm Bridge International Academies (now NewGlobe) “abandoned” its students and teachers during the height of the Covid-19 pandemic, shutting down schools and cutting teachers’ salaries by 80 to 90 percent despite being paid by the government.
And yet, in 2021, the Liberian government indefinitely extended the project, effectively subsidizing a US for-profit firm at a cost that is at least double government spending on public schools.
In Peru, the Expressway Yellow Line has emerged as one of the most controversial projects ever carried out. This toll road was supposed to ease congestion issues in the capital city Lima, but instead toll rates have been unreasonably increased on at least eight occasions.
This generated almost $23 million for the private company involved and transpired with the complicity of public officials. Meanwhile, the Peruvian state suffered economic damages of $1.2 million due to under the table negotiations between public officials and the private company, which led to the incorrect implementation and improper modifications of the contract years after it was initially signed.
Today, questions regarding the project and conflicts surrounding its implementation remain, while Lima residents’ expectations of quality road infrastructure to improve living conditions for those who have been most affected continue to go unmet.
The human cost of the PPP projects showcased by History RePPPeated II is self-evident, but they are far from the exception. Rather they serve to illustrate common failures with the PPP model that risk compromising fundamental human rights and that undermine the fight against climate change and inequalities.
Their continuing promotion is one of the many reasons why we support the Santiago Declaration. Together with all its signatories, we will strengthen resistance to PPPs with their focus on private-led interests and promote public-public or public-common partnerships for a future that is public.
Océane Blavot is senior campaign and outreach coordinator, Development Finance, European Network on Debt and Development; Rodolfo Bejarano is economist and analyst, New Financial Architecture, Latin American Network for Economic and Social Justice; Mae Buenaventura is Debt Justice Program team manager, Asian People’s Movement on Debt and Development.