The risky business of PPPs - The World Bank's guide to public-private partnership contracts

Contracts between states and private companies for the long-term operation of central infrastructures, so-called "public-private partnerships" (PPPs), have become established in recent decades. The World Bank also relies heavily on this model. This is despite the fact that the projects often do not deliver what is promised and major problems often arise. Since 2015, the World Bank has developed a special guide with model provisions for PPP contracts. This is intended to advise the public sector, but is essentially written in such a way that the interests of the private sector are much more important than those of the public sector. The private parties should have strong claims for compensation and be able to sue for these through foreign courts or international investor-state dispute proceedings. The "risks" that compensation can entail include many measures taken by the public sector, such as the granting of licenses or numerous legal changes. In practice, the state should also always be liable if an unforeseen event such as a natural disaster or even certain strikes occur. It is true that the latest version of the 2019 guide has brought a few improvements, for example on the return of infrastructure. Nevertheless, the protection of legitimate public measures remains marginal compared to the protection of private profit interests.