That’s one of three issues addressed in a new report from USDOT’s Inspector General, “Financial Analysis of Transportation-Related Public-Private Partnerships” (link to 28-page PDF).
The bottom line: PPPs rarely generate “new” money. Investors are providing funding up front, and/or are assuming more risk, and expects to be reimbursed with a profit over the length of an agreement. PPPs “change the timing with which funds become available, but generally do not increase overall funding levels.
The report had three objectives: to identify financial disadvantages of PPPs over traditional public methods; identify factors that help PPPs derive value; and assess whether PPPs close the infrastructure funding gap. The authors did not analyze the potentially significant advantages of risk sharing arrangements or the ability of the private sector to deliver a project more expeditiously.