Public–Private Partnerships in Urban Infrastructures: Reconciling Private Sector Participation and Sustainability

TLDR

Rapid urbanization strains governments’ ability to build, maintain, and operate public infrastructure, prompting reliance on private investment, yet concerns about short‑term profit motives threaten long‑term sustainability goals. The study reviews literature on private sector participation in urban infrastructure to identify governance practices that facilitate or impede aligning such participation with urban sustainability objectives. The authors conduct a literature review of private sector participation in urban infrastructure projects to identify governance practices influencing the alignment of private investment with sustainability goals.

Abstract

The speed and scale of urbanization provide serious challenges for governments all over the world with regard to the realization, maintenance, and operation of public urban infrastructures. These infrastructures are needed to keep up with living standards and to create conditions for sustainable development. The lack of public funds and the inefficiencies of public service provision have given rise to initiatives to stimulate private parties to invest their resources in public urban infrastructures. However, private sector participation creates a whole range of new challenges. The potential benefits are countered by concerns about the compatibility of the private sector‘s focus on short‐term return on investment with the long‐term perspective needed to realize sustainability targets. On the basis of a review of literature on experiences with private sector participation in urban infrastructure projects, this article identifies governance practices that help or hinder the reconciliation of private sector participation in urban infrastructure projects with the objective to increase the sustainability of the urban environment.