Revisiting the Portuguese experience with public- private partnerships

Abstract

Over the past decades, large investments have been made in energy, transportation, health, and water supply, among other public services, in order to foster economic growth and allow for better living conditions. Public budgets constraints and an inability to manage large and complex projects widened the private sector involvement in providing and managing public services, though few countries choose to completely liberalize sectors of special public interest. Until a couple of decades ago, infrastructure delivery followed traditional procurement models where the service was contracted under a list of specifications, based on a simple transaction model, with no long-term relation. Today, Public-Private Partnerships (PPPs) arrangements are the preferred mechanism to deliver large infrastructure. Portugal’s experience in developing PPP projects started in 1994, in the road sector, and results have encouraged the expansion to other sectors. These projects placed Portugal as the largest EU country in PPP spending in percentage of GDP. Mistakes were made, and lessons learned. This paper addresses the development of PPP arrangements in Portugal, where several large-scale projects were developed under this procurement scheme, extracting lessons and policy implications for governments, practitioners and academics. Key words: Public-private partnerships, infrastructure investments, Portugal.