As the self-government sector in Poland is facing the problem of rapidly growing debt, the issue of effective management of local debt has become of crucial importance. The use of the PPP formula in self-government investment projects is one of the ways to limit debt. Two new legal regulations gave the ‘green light' to this kind of cooperation: the public-private partnership bill of December 19th 2008 and the works and services concession bill of January 9th 2009. However, the PPP formula must not be viewed solely as an alternative to debt (as is done by most authors). There is even a risk that debt will further increase as a result of applying the PPP model. The European Union has been aware of this danger for a long time, as can be concluded from the Eurostat Decision 18/2004 regarding the way it would treat the influence of public-private partnership on public debt and the financial deficit of the public sector. The aim of this paper is to assess the advantages and the drawbacks of the PPP approach as used by the self-government sector, with particular focus on the possible impact on local public debt of liabilities resulting from the implementation of PPP projects.
Financed by the National Centre for Research and Development under grant No. SP/I/1/77065/10 by the strategic scientific research and experimental development program:
SYNAT - “Interdisciplinary System for Interactive Scientific and Scientific-Technical Information”.