Public-private partnerships (PPPs) in local services: risk-sharing and private delivery of water services in Spain

Local governments are increasingly utilising the public-private partnership (PPP) model as a means of organising service delivery in the public-private domain. This article examines the experiences with construction and operation of 131 PPP wastewater treatment plants in the region of Aragon, Spain. The study highlights how an inadequate management of construction risk and unsuitable transfer of demand and revenue risk resulted in significant time delays in execution of the PPP projects. The research also shows how the involvement of public bodies at local, regional and national level further added to the complexity of implementing the projects. The findings contribute to the literature on local service delivery and provide insights regarding risk transfer in long-term PPP contracts for the delivery of local services in general and water services in particular.