(10 February 2017) In an open letter (EN – FR – ES) Eurodad, PSI, EPSU and others criticise the World Bank’s consultation on Recommended PPP Contractual Provisions and demand that is is put on hold until accounting problems which make PPPs fundamentally flawed and dangerous are fixed.
Many countries hide the true costs of PPPs by keeping them off the accounting books ("off-balance sheet"). This creates the dangerous illusion that PPPs are cheaper than they really are, while in reality they have left massive debt burdens for future generations. If PPPs had to be transparently accounted for, very few would go ahead.
So far the World Bank has refused to take a clear position on the need for on-balance sheet accounting and even mentioned at last year's annual meetings that it would not reject a PPP if the partner country decided to keep it off the books. Also in the report on contractual provisions the bank remains ambiguous. The reports prepared by the Bank can have a significant impact on the decision-making on PPPs in developing countries. Many new PPP units base their decisions on World Bank advice.
World Bank: Recommended PPP Contractual Provisions for public consultation.
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