The European Investment Bank and PPPs
Between 2005 and 2010 the EIB – the EU’s bank, which is supposed to follow EU policy – financed 85 PPP projects (pdf) with a total of EUR 15.2 billion, mostly in the transport sector but also with a significant number of projects in the health and education sectors. Most of these projects were in the UK, Spain and Portugal, with very few in central and eastern Europe.
Like the EBRD, the EIB has financed or planned to finance several particularly controversial PPPs.
It planned, with the EBRD, to finance both the Moscow – St. Petersburg motorway and the D1 motorway Phase 1 PPP in Slovakia.
Is the EIB promoting PPPs or not
Unlike the World Bank and the EBRD, the EIB states that it
“reflects EU policy on how public projects are procured and has no preference as to whether a project is implemented using conventional public-sector procurement or via a PPP. The Bank may be perceived as supporting the use of PPPs but its actual position is one of neutrality between the two procurement mechanisms. Its involvement in PPPs is a reflection of how a number of its clients want to procure their projects. Similarly “PPP” is not an eligibility criterion for the EIB”.
The EIB’s supposed neutrality on PPPs follows EU law:
“Community law on public contracts and concessions is neutral as regards the choice exercised by Member States to provide a public service themselves or to entrust it to a third party.”
However, particularly in the case of the Trans-European Transport Network, the EU and EIB do actively encourage PPPs through their Loan Guarantee Mechanism for PPP projects in the Trans-European Transport Network.
Moreover in September 2008 the EIB and European Commission launched a new European PPP Expertise Centre (EPEC) for public authorities working on PPPs. The Centre does not aim to give advice on individual projects but instead to provide policy and programme support and network activities to identify best practice in areas of concern to its members.
While the Centre’s mission is not specifically to promote PPPs, the fact that resources are being put into training public authorities to carry out PPPs rather than into improving public procurement or other financing possibilities is likely to have the effect of promoting PPPs.
Examples of controversial PPPs financed by the EIB
– the London Underground PPP, UK
– the M25 widening scheme, UK
– numerous education and health sector projects in the UK
– the A5 Ostregion PPP motorway section 1, Austria
– the Beiras Litoral e Alta motorway, Portugal
– the Brussels wastewater treatment plant, Belgium
(Read more one these projects in our case studies.)