Public-Private Partnerships

Chapter 5

The Public-Sector Investment Decision

§5.1 Introduction

This chapter reviews how the Public Authority decides to invest in new public infrastructure, and whether doing so via a PPP is the right approach. There are various measures which a Public Authority may use to determine if an investment in new public infrastructure is economically justifiable (§5.2). These measures do not of themselves point in the direction of either public-sector procurement or a PPP. Additional factors need to be taken into account to make this decision:

• VfM (§5.3);

• Affordability (§5.4); and

• balance-sheet treatment (§5.5).

Of course since the demand for funding for public-sector projects is almost infinite, and resources are limited (even with the help ...