Bilfinger Berger Magazine 1/2009

PUBLIC SECTOR SATISFIED WITH PPP
The market for PPP projects in Germany may be cooling off as a result of the financial crisis, but development in the medium term will remain stable. Based on a survey of local authorities, states and the federal government, the German Institute of Urban Affairs (Difu) confirms that by 2014 a “huge” volume of pro - jects amounting to almost € 15 billion will be implemented.

PPP projects are expected to account for up to five percent of local authority investments, and a somewhat lower percentage of federal and state government spending. This is still well short of the federal government’s ambitious target of increasing the proportion of PPP projects to 15 percent.

According to Difu, out of 541 respondents, 18 percent stated that PPP projects were already in preparation in their area of competence. There are also a series of public sector projects with PPP potential. It is highly likely in the major cities in particular that PPP projects will be initiated and realized over the next five years.

Difu estimates the value of projects that are already in prospect at some € 9 billion, with a further € 5 billion or more potentially realizable in the next five years. This adds up to an overall volume of € 14.2 billion between now and 2014.

To ensure that this potential is realized, the authors are adamant that the conditions for PPP projects must continue to develop along positive lines and the parties involved must maintain a high commitment.

A parallel survey of business enterprises conducted by TellSell Consulting revealed a broad consensus between public and private partners on central issues: Both sides agree that the most important factors for the success of a PPP project lie in the initial phase. Three quarter of the partners in both sectors are satisfied with their experience of PPP. (li)

Bilfinger Berger Magazine 1/2009