Economic analysis of Private public partnerships:a case study of 'Toll Collect GmbH' in Germany

Private Public Partnerships (PPP) are getting established in an increasing rate. They are seen as perfect substitutes to traditional procurement of public goods and services, like education, health care or infrastructure. Their objective is to deliver the public goods / services to the public in higher efficiency, higher quality and contribute to the country’s economic growth. This thesis analyses modern PPPs and why some of them tend to fail in the long run. For this thesis, failure means the PPP becomes a public company, has high transaction costs or gained a bad reputation during its operation period, because the public has to carry the main costs of the potential malfunction. To reach the thesis objective, the thesis is split in two main parts: the theoretical approach and the case study. The theoretical approach evaluates of PPPs on the theoretical level, the case study gives a real-life example for a PPP, the “Toll Collect GmbH” from Germany. During the research for both approaches, several factors and issues emerged considering the PPP-performance. These findings are the main focus in the discussion and are vital for the overall PPP-success. The research findings indicate that human misbehaviour (opportunism, etc.), internal problems between the partners (conflict of interest), the bias reliability of the available “hard data” and planning mistakes on microeconomic level are responsible for a PPP-failure. These findings are related to other issues regarding transparency, monitoring and cost handling of PPPs. To reduce the failure rate for the future, the thesis proposes a better governance structure with an independent audit body, CSR standards for the project partners and the higher consideration of scientific research in that field during the planning period.