Due to the dire financial situation of municipal and local authorities, the urgently required investments in the field of public-sector building construction can only be realized with the help of private partners in future. Experience gathered in other European countries has shown that by applying PPP models, the burden on public budgets can be eased and infrastructure projects be realized in much less time and more efficiently. Saving potentials of an average 10 to 20 percent can be tapped. In some segments in the UK, for instance – schools, hospitals and police stations – 15 percent are privately implemented and operated.

The efficiency advantages of PPP models are mainly due to the fact that private partners can optimize the life-cycle costs of a project bottom-line. To this end, the follow-up costs for servicing and repairs are kept as low as possible. Another factor are shorter planning and construction times as well as optimized operations. The transfer of risks to private partners also is an advantage for the local authorities. In practice this could mean, for example, that the private operator offers fixed-price facility management costs long-term.

Thus, with the help of PPP models, an ever more critical problem - the public-sector investment backlog - can be solved. Our expectations now are that in the field of schools, administrative buildings and hospitals alone, the volume of PPP projects put out to tender by 2010 will amount to more than EUR 10 billion.

After the UK example, private enterprises are planned to be involved to a higher degree in the construction, refurbishment and management of schools, administrative buildings, hospitals and similar facilities in future in Germany, too. In order to realize the construction of a new school for example, private partners can build a school at their own cost. The municipal authority will then rent the building. For refurbishment projects, transfer-of-use models can be agreed: The local authority remains the owner while the private company carries out the refurbishment works and operates the building for a usage fee.

In October 2004, HOCHTIEF won the biggest ever PPP project so far in Germany: refurbishment and operation of 50 schools in the rural district of Offenbach, representing a contract volume of about EUR 410 million. HOCHTIEF is one of the few companies which can boast both experience and know-how in the fields of planning, financing/structuring, construction, refurbishment and facility management. This experience and know-how is an indispensable prerequisite for being able to guarantee optimum performance of the agreed overall service package for the local authorities over a project period of 15 to 30 years.