Public-private partnerships ‘key’ to cohesion and growth

The 350 billion euro budget for 2007-2013 for developing Europe’s regions will be insufficient unless more private capital is made available, according to Regional Policy Commissioner Danuta Hübner.

“The public sector alone does not have the capacity to carry out the large-scale infrastructure projects needed,” said the Commissioner at the 2006 Open Days – the annual week-long meet for Europe’s towns and regions. “To be brutally frank, we do not think we can make it without private capital joining in,” she added. 

In countries where domestic public finances are already strained due to strict EU fiscal requirements, Hübner believes that the solution is to encourage public-private partnerships (PPPs). These will not only bring new sources of finance on board, they will also allow the provision of more efficient and cost-effective services by pooling together expertise. 

In a debate on 11 October, a representative of General Electric pointed out the private sector can be wary of getting involved in PPPs due to fear that, for long-term projects, an agreement concluded under one administration will be challenged by the succeeding one. 

Polish MEP Jan Olbrycht noted that the public sector can also be reluctant to get involved in PPPs for fear of being accused of corruption. 

Internal Market Commissioner Charlie McCreevey said: “It is clear that a legislative initiative at EU level is required,” adding that a proposal could be made in the first half of 2007. 

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