Financial Sustainability of the Private-Public Partnership Projects: Legal Framework in the Republic of Croatia

Background: Some General Figures About Ppp Projects

Blanck Brude at al. (2007) in their paper offered an updated description of the macroeconomic and sector significance of PPPs in Europe, without assessing PPPs from a normative perspective. The description shows that, over the past fifteen years, more than one thousand PPP contracts have been signed in the EU, representing a capital value of almost 200 billion euro. While PPPs have in recent years become increasingly popular in a growing number of European countries, they are of macroeconomic and systemic significance only in the UK, Portugal, and Spain. In all other European countries, the importance of investment through PPPs remains small in comparison to traditional public procurement of investment projects. However, PPP procurement is used extensively for major projects and this is spreading out from transport into other sectors. Although governments increasingly use PPPs, these arrangements still constitute a relatively small component of total public sector investment. The United Kingdom figure of 12% mentioned above is one of the largest. Some countries also informally state that they do not foresee PPPs exceeding 15% of total public investment, one reason being the rather cumbersome process of creating a PPP (OECD, 2008). However, notwithstanding difficulties, countries such as Australia, Germany, Korea and South Africa, as well as France, Portugal and Spain, increasingly use PPPs (Burger & Hawkesworth, 2011). The importance of PPP is even bigger, if we know Europe not only has a euro crisis, it also has a growth crisis. That is because of its chronic failure to encourage ambitious entrepreneurs. Data show that continental Europe has a problem with creating new businesses destined to growth (The Economist, 2012).