Accommodating Sweden's growth will require new and improved highways, mass transit, hospitals, schools and housing, and these will require large investments. To provide the best value for tax money, Mats said procuring public projects should be done differently from traditional methods, which typically focus on lowest cost as the main selection criteria. Through PPP, governments benefit from a proven project delivery method that provides the right incentives for smart, long-term solutions and innovative ideas.
Models for Sweden
Sweden is still early in using PPPs, which usually involve a private consortium responsible for financing, designing, building, operating and maintaining the project. (The New Karolinska Solna hospital near Stockholm is one example of this.) With PPPs, the sharing of risks is optimized between the government and the private sector, with the government benefiting from predicable long-term costs and a guaranteed schedule. PPPs are widespread in the UK and Canada, and are becoming more common in the U.S. and Europe. Mats suggested that Sweden could learn from such examples to develop a Swedish model for PPPs.
"We see that Sweden is lagging behind other countries when it comes to using forms of procurement that stimulate innovation and lowest life-cycle cost," Mats says.
Experience from other countries has shown that PPP projects are typically completed on time, on budget and with innovative solutions. By comparison, research studies and evaluations from the Swedish and Norwegian national audit revealed recurring cost overruns and delays in traditional projects.
Five suggested PPP projects
Mats suggested five Swedish projects that would be ideal for delivery via PPP:
- Fixed link between Helsingborg and Helsingör
- Expansion to four tracks between Uppsala and Stockholm
- Östlig förbindelse (Eastern connection) in Stockholm
- Södertörnsleden in Stockholm
- Metro between Malmö and Copenhagen
These projects will provide significant benefits to society through enhanced transport system capacity, better connections between labor market regions and by creating conditions for increased housing. Due to their scale and importance, these projects must be implemented with priorities placed on long-term sustainability and cost effectiveness. To enable the best way forward for these and other projects, Mats encouraged Parliament to allow for PPP in the infrastructure bill.