The ESSU UK PPP EQUITY DATABASE and the PPP WEALTH MACHINE: UK and GLOBAL TRENDS in TRADING PROJECT OWNERSHIP report on the sale of equity in PPP projects in the UK and globally.


Records 281 PPP equity transactions involving 716 PPP projects (including multiple changes in some projects) 1998-2012.

Includes a sample of 93 transactions involving 226 PPP projects profit and annual rate of return data.

Download a copy of the spreadsheet

Download Appendix 1: Methodology and design of the database

Download a copy of PPP WEALTH MACHINE: UK and GLOBAL TRENDS in TRADING PROJECT OWNERSHIP report and/or Appendices


High profits and annual returns

The average annual return on the sale of equity in UK PPP project companies was 29% between 1998-2012 – twice the 12%-15% rate of return in PPP business cases at financial close of projects. PPP equity was sold an average of 6 years after the financial close of the project. The annual return for infrastructure investment is significantly higher than the annual return for shares, bonds and property investment.

Twelve PPP projects had an annual rate of return of over 100% and another 25 had an annual rate of return of between 50%-100%. PPP profits remain unregulated with no profit sharing with the public sector. The excess profit could be £2.65bn, all of which benefits private sector companies.

Unprecedented scale

Equity in 716 PFI/PPP projects (includes multiple transactions in some projects) has been sold in 281 UK transactions worth £5.8bn since 1998. Health and Education PPP projects account for over 60% PPP equity sales between 1998-2012.

The total rises to 1,515 PPPs and £12bn when the sale of infrastructure funds, corporate takeovers and mergers and public sector buy-outs of terminated contracts are included, The number and value of secondary market transactions was largely unaffected by the global financial crisis.

Financialisation of public infrastructure

PPPs have had a key role in accelerating and embedding financialisation in the public sector and the economy. Banks and other financial institutions finance PPP projects, form joint ventures with construction companies and many have established their own infrastructure funds. Financialisation, together with personalisation, marketisation and privatisation, comprise the main methods being used to drive the neoliberal transformation of public services and the welfare state. Privatisation has mutated to create new pathways, such as the transfer of services to arms length companies, individual choice and market mechanisms, partnerships and outsourcing, and community asset ownership.

Why ownership and control matter

The sale of PPP equity provides new opportunities for profiteering, can invalidate value for money, increases offshore tax avoidance, erodes democratic accountability, increases secrecy and trading of publicly financed assets with significant negative consequences for the future of public services and the welfare state.

Growing power of offshore infrastructure funds

Offshore infrastructure funds now account for over 75.0% of PPP equity transactions. They have grown rapidly, building portfolios of public assets with equity in 315 UK PPP projects. Five funds have 50%-100% equity ownership of 115 projects. Tax avoidance by infrastructure funds results in a significant annual loss of tax revenue.

Global transactions

The sale of PPP equity is increasing in the rest of Europe, Canada, Latin America, Australia and Asia with 146 equity transactions valued at US$103bn involving 297 PPP projects. Toll roads and highway projects account for three-quarters of projects. Although profit/loss and rate of return data is sparse, seven projects had profits between 46%-74%.

Wealth machine

The sale of PPP equity has economic impacts, not least in terms of who is funding the excessive PPP profits and who suffers the loss of tax revenue. Profits are retained by parent companies and ultimately benefit shareholders through dividend payments. It is little more than a wealth machine for construction companies and finance capital. The high cost of PPPs and equity transaction profits absorb public resources that could fund infrastructure investment or other initiatives that support sustainable economic growth.

Impact of the new UK PPP model

Private Finance 2 (PF2) is essentially a rebranding of PFI. It does nothing to address the profiteering from the sale of equity in current PFI projects. Public sector minority equity stakes in future PF2 projects is likely to have a marginal effect on windfall gains and entrap local authorities, the NHS and other public sector organisations in playing the secondary market. The measures to increase public disclosure are meagre and likely to be ineffective.

Equity sales in bailed out NHS Trusts

PPP equity was sold in five of the seven NHS Trusts, which are being bailed out by the Department of Health, plus nine other NHS trusts are reported to be in financial difficulties. The average rate of return from the sale of equity in PPP hospital projects is 25.5%, so the private sector has extracted millions in excess profits from these projects whilst NHS Trusts seek additional public money to cover their PPP financial commitments.

Construction profits

Ten major construction companies sold £1.4bn equity in 195 PPP projects between 1998-2012 making £520m profit. Six PPP companies, Interserve, Amec, John Laing, Costain, Vinci and Kier transferred PPP equity to their pension funds in lieu of cash payments.

Lack of transparency

Government monitoring of the sale of equity in PPP companies has been inadequate, infrequent and has under-estimated the scale of transactions. The high degree of obfuscation or concealment of PPP equity transactions is a travesty of transparency. The HM Treasury and National Audit Office (NAO) endorse the business creed that PPP equity transactions are a private matter, despite the fact that PPPs are ultimately entirely publicly financed.

Multiple transactions in some PPP companies

Equity in the Calderdale Royal Hospital PPP project changed ownership nine times since financial close on 31 July 1998, six direct equity transactions and three changes in corporate ownership, which transferred PPP equity ownership to a different company. This is the highest recorded number of transactions of a PPP project and illustrates the complexity of many equity transactions and the systemic failure to disclose public information.

Additional state guarantees for private sector

In 2012 the government funded a £1.5bn bailout of seven NHS Trusts in financial crisis with large PFI projects. It also introduced further state guarantees for the private sector despite PPP projects already having a high degree of security through public funding.


The PPP programme should be terminated and replaced by a programme of public investment and new regulatory controls on existing PPP projects. Existing PPP project contractual terms should be amended and/or legislation introduced to require profit sharing with the public sector. Improved governance, rigorous monitoring and radical changes must accompany new disclosure requirements. New financial regulations should ban the transfer of ownership of PPP infrastructure assets to offshore tax havens.


European Services Strategy Unit, Duagh, Camp, Tralee, County Kerry, Ireland.
Copyright © 1998-2017 European Services Strategy Unit

This document was created by Dexter Whitfield on 2012-11-04 18:29:03.
This document was last modified by Dexter Whitfield on 2016-08-30 17:47:10.
This website has been developed, maintained and hosted by Webarchitects since 1998.