Stimulating sustainable infrastructure development through public–private partnerships

Abstract

The addition of sustainability objectives to infrastructure projects is still seen by many as an increased risk, rather than a value adding enterprise. This paper considers an alternative idea in which public authorities can, in a controlled fashion, utilise the risk-transferring mechanism characteristic of a public–private partnership (PPP) to increase a project's sustainability development. Although a wide range of variables determines whether a PPP is applicable for an infrastructure project, this research specifically explores the ability of a PPP to stimulate investment in sustainable innovation and thus increase value for money. The paper provides a critical analysis of existing relevant literature of sustainable development, industry-specific obstacles to innovation and the pros and cons of innovating in a PPP. Five prototype ‘contract levers’ are presented to support a mutually beneficial risk-sharing partnership between the authority and concessionaire. They do so by simultaneously utilising the advantages of a PPP, accounting for the disadvantages and overcoming obstacles to innovation. An examination of two recent PPP projects explains the practical application of the levers.