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Home Learn About P3s When Do P3s Work?

When Do P3s Work?

In general, P3s produce value for larger public infrastructure projects (they warrant the transaction costs and attract sufficient private sector interest) and for complex projects (the value of the risk transferred is higher than the incremental financing costs).

However, P3s are not the solution in every case.  P3s provide benefits but they also involve costs.  The cost of private sector finance is higher than government borrowing, as it reflects risk adjusted returns.  In addition, P3s involve transaction costs to structure (legal, financial). 

As a result, in order to ensure the best possible value for the taxpayer, a detailed value for money analysis is required to assess whether the costs exceed the benefits.