The Road Ahead: Exploring the Potential of Public-Private Partnerships in Closing the European Infrastructure Investment Gap

Abstract: Modern infrastructure assets are fundamental for the long-term economic growth and development of countries and regions. Yet, the European infrastructure investment gap is projected to reach USD 2 trillion by 2040. One approach to closing this infrastructure investment gap is strengthening the collaboration between the private and public sector. In public-private partnerships (PPPs), substantial risks and responsibilities for delivering projects are transferred to the private sector. Through the examination of three case studies on PPP road projects and interviews with 23 stakeholders knowledgeable about PPPs, this thesis explores how PPPs can be used in delivering European infrastructure assets, with a specific focus on how Sweden should approach them. We find that attitudes toward PPPs differ among countries in Europe, but that the perceptions are oftentimes sprung from misconceptions. PPPs must not be categorically dismissed, which has generally been the case in Sweden. Rather, they must always be evaluated as a method among others for delivering infrastructure, albeit chosen only for projects with certain characteristics that generate competitiveness. We further conclude that for well-suited projects, PPPs provide advantages over traditional procurement methods through better risk allocation and aligned incentives as well as by necessitating a long-term perspective for the public sector. Thus, we strongly suggest that Sweden, and other European countries, embrace the PPP model as an option in delivering infrastructure assets to more efficiently narrow, and ultimately close, the European infrastructure investment gap.