Quote:
Originally Posted by fredinno
PPP isn't government debt. If government doesn't have a share in the company, the risk is placed to the public sector. Thus the government gets no debt, and the company that faced that risk is the one who pays up the debt.  |
...except private partners won't accept that level of risk, so in order to attract them the government has to guarantee revenues by stipulating the expected traffic volumes. When those volumes don't materialize, the government is on the hook for the difference.
What that effectively means is that the risk is still borne by the government, and because the debt is held by a private company it's more expensive to service. So when the predicted traffic volumes don't materialize we taxpayers end up paying more money than if the government held the debt.
The only real "benefit" is that the government gets to keep the debt off its books. It's a financial shell game, IMHO.