A mature conversation
It’s not often you get esteemed speakers from the five biggest PPP markets in the world together in a London hotel. But last month, at PPP Bulletin’s Big 5 event at the Marriott Grosvenor Square, public and private sector luminaries from Canada, the US, France and Benelux joined some familiar UK names to look at the road ahead for all five markets.
Although each at unique points on the road to maturity, each market had a lesson for the other in how to face the myriad of challenges being gurgled up by today’s global economy.
Putting the UK to one side for a minute – arguably the most troubled of the five – it was France that tackled the question of political risk, following the recent appointment of Francois Hollande as president.
With the sort of innate confidence usually only managed by the French, Francois Bergere at the MAPPP assured the audience that Europe’s strongest PPP market is not going anywhere, despite concerns over how a Socialist leader may view the procurement mechanism and concerns over the liquidity of the French banks.
Yes, deals might decrease in size compared with last year’s spike, but there were programmes in the defence, prison and university sectors that will continue under their own steam, he said.
Thierry Deau at Meridiam went one step further by saying Hollande might even get behind a headline project such as the billion-euro metro line around Paris or the Franco-Italian rail link.
Although the Dutch market has a great deal to be proud of in terms of procurement over the past 12 months, Merlijn Nijhof, senior PPP adviser at the Finance Ministry, struck a more measured tone during discussions that followed.
‘We are getting mature, but we are not there yet’ was the resounding message.
Regional PPPs and wet infrastructure (ports, dams and locks) are new areas now being targeted, she said, but we must not be tempted to run before we can walk.
Creativity and innovation in the region was also applauded. Looking at Belgium, Paul Nash at DIF pointed to the DBM+F split procurement of projects such as Kempen and R4 Ghent roads. In the Netherlands there were further hints of a government plan to open up the bond markets for PPPs.
Canada had surprisingly little new to say, but did offer some direction for the Netherlands on bond financing.
Its bond market is now effectively competing with banks for short and long-term debt and predictability on pipeline is still there for all to see, said speakers from CCPPP and P3 Canada. On the sidelines however one adviser hinted that the switch from healthcare PPPs – which have now reached capacity – to water and light-rail may yet cause some problems as investors re-price risk. Proof that even in the world’s most robust market for PPPs uncertainty is never far from people’s minds.