National governments are holding back EU regional funding from local authorities that work with private contractors to deliver transport, waste and water services, according to E3PO, a group which promotes public-private partnerships (PPPs).
E3PO's chairman, Jean-Pierre Tardieu, said companies which provide public transport, water and waste services – as well as constructing and operating hospitals and airports – are losing out on contracts worth millions of euros.
"E3PO has been informed by its members about procedural difficulties in the allocation of structural funds to local authorities interested in a private operator," he said, noting that the European Commission has committed itself to addressing the issue. The Commission published a communication on PPPs in November 2009.
"It is in the interest of member states and EU citizens that structural funds are allocated solely on the basis of the objectives pursued, in a transparent manner and without discrimination on grounds of the public or private nature of the operator," Tardieu said.
He said PPPs are set to become an increasingly common feature of public service delivery as cash-strapped governments look to share the risk of funding major projects.
As well as road-building and sanitation services, the private sector could have a bigger role in running childcare centres and prisons, he said.
Tardieu rejected claims by critics of the PPP model who say involving the private sector is an expensive accounting "trick" used by public authorities to keep debt off their balance sheets (EURACTIV 25/09/09).
He described this as "a simplistic caricature of PPPs," adding that modern partnerships between companies and public authorities have evolved beyond simple outsourcing or subcontracting.
"PPPs are a true co-production of public services provided to citizens, in which public authorities and operating companies play different and complementary roles. The public authority decides, delegates and controls, the company implements, taking the risks inherent to any economic activity," Tardieu said.
He said financing is only one element of PPPs and that such arrangements are also attractive because they deliver on time and on budget.