Legacy PPP systems cannot deliver at the pace, scale and complexity the world now needs

A public-private partnership, or PPP, is a long contract in which a government and private companies build and run a public service together, such as a road, a power plant or a water network. PPPs have done useful work for a long time. The system around them was built for a slower world, where each project stood alone, and it can no longer deliver at the pace, scale and complexity the world now needs.

Why are legacy PPP systems so slow?

A traditional PPP moves at the speed of its paperwork. In 2018 the European Court of Auditors, which checks how the EU spends its money, reported on 12 PPPs backed by EU funds. One third of them took 5 to 6.5 years just to choose a company and agree the deal. Of the 9 projects that were finished, 7 ran late, by anywhere from 2 to 52 months.

Even the quick cases take a long time. IJGlobal, which tracks infrastructure deals, looked at five years of deals completed from 2009 onward. Spain and the Netherlands, the two fastest countries in its ranking, took about 22 to 23 months from the start of the tender to the day the money was in place. A schools program in Greece took 83.2 months, close to 7 years.

Compare that with private building today. Epoch AI estimates that a giant one-gigawatt data center takes about 2.1 years to build. So a company can finish a huge new building in roughly the time that the fastest PPP systems in that ranking needed before work on a project could properly begin.

Why can they not reach the scale the world needs?

McKinsey estimated in 2025 that the world will need about $106 trillion of infrastructure investment through 2040, which is roughly $7 trillion a year. Over the next fifty years, rebuilding and running the world’s infrastructure will take about $500 trillion.

Now look at what the current system produces. The World Bank counts private investment in infrastructure across low- and middle-income countries. In 2024 it found $100.7 billion in 315 projects, which was 0.27% of those countries’ combined economic output. The two sets of numbers measure different things, since the World Bank counts only private deals in those countries, but the distance between them is still very large.

Part of the reason is how each deal gets made. Most projects start from a blank page, with their own studies, their own lawyers and their own advisers. Those costs make sense for a large highway, and they are hard to carry for one water network or one clinic, so small projects often never happen.

Money is the other limit. An investor’s money can stay stuck in a road for decades, and usually only large institutions can buy in at all. The people who use a road or a water network rarely own any of it, which leaves a huge pool of savings outside the system.

Why do long contracts struggle with complexity?

A 30-year contract depends on guesses about the next 30 years, and those guesses often go wrong. A World Bank study by José Luis Guasch looked at more than 1,000 long private contracts in Latin America and the Caribbean from 1985 to 2000. In all, 74.4% of the water and sanitation contracts and 54.7% of the transport contracts had to be renegotiated, on average just 2.2 years after they were awarded.

The EU auditors found the same problem with forecasts. Use of the projects they checked came in up to 69% below forecast for digital networks and up to 35% below for motorways. They also found that most of the digital projects fit badly with long contracts, because the technology changes so fast. Energy shows how far off expert forecasts can be. Experts expected solar costs to fall 2.6% a year between 2010 and 2020, and they actually fell 15% a year.

Projects also depend on each other more than they used to. A data center needs power, water and land at the same time. The Aqaba-Amman water project will bring 300 million cubic metres of desalinated Red Sea water a year to Amman, which ties a plant by the sea, a long pipeline and a large power need into one project. A system that treats each contract on its own has no easy way to plan for links like these.

What does this do to public trust?

Slow and costly deals lose public support. In 2018 the UK’s government auditor, the National Audit Office, reported that one group of schools built under the country’s PPP program cost around 40% more than if the government had borrowed the money itself. It also reported £199 billion of payments still to come on these deals, and later that year the UK stopped using them for new projects. In Greece, the EU auditors found that the cost per kilometer of three motorways rose by up to 69% while their scope was cut by up to 55%, mainly because of the financial crisis and poorly prepared projects.

The same auditors also found that the 9 finished projects they checked showed good levels of service and maintenance. So the case for working together on infrastructure still stands. The trouble lies in the time, the cost and the planning needed to get there.

What could a better system look like?

Infrastructure has to scale as a system, where every project teaches the next one. Shared templates and shared data would replace the blank page. Deals would come with set dates to review and update them, and the public would be able to see how each project is performing.

Three technologies make this possible. Artificial intelligence can draft studies, compare bids and run assets from day to day, which makes each deal cheaper to prepare. Robotics can build, inspect and repair, including in places that are too dangerous for people. Tokenization splits ownership of a project into small digital shares that people can buy and sell online, which lets more people invest and gives investors a way out.

Together these technologies point toward the infrastructure singularity, the point where the built world starts improving itself faster than anyone can direct it. They are still young, and they will need good laws, honest numbers and careful oversight along the way.

Where does Jordan fit in?

Jordan has $86 billion of PPP and infrastructure projects in development, including $46 billion in Aqaba. Article 15 of its PPP Law lets any private company take its own PPP idea to the Ministry of Investment or a public authority, so new ideas have a direct way in. The mission of Jordan PPP is to build the most advanced PPP system in the world, and www.JordanPPP.com offers 96 organization guides and 23 sector guides for free. To take your team through all of this, book a presentation.