Tuesday, December 7

The challenge of rebuilding the broken bridges between the public and the private

Mid-nineteenth century, the first railroads forever changed the landscape of Spain. Long wagon trails began to tear the national geography, revolutionizing industry and the habits of the wealthiest part of society in equal measure. A chapter in our economic history, not exempt from dark clouds, which, however, could not be written today without the contribution of financial capital from proper names such as the Rothschild family or the Pereire brothers. History would repeat itself years later, in the 60s and 70s, when it was the turn of the deployment of the national highway network and national reservoirs, infrastructures that were also born from agreements between the public power.

and private companies.

With its successes and errors, the public-private partnership He has been with us for years and always setting the economic course of the country. Now, the year 2022 bears the next mark in red on the calendar. The challenge of the arrival of European funds It seems to be of a similar magnitude to that of the landing of those millionaire railway investments for a public and fiscal sector with hardly any structure to digest or manage it. Experts agree that the opportunity is now even greater. But equally it is the challenge of restoring the splendor to a cooperation formula that has gained prominence in the Covid crisis, in which private hospitals have gone hand in hand with public administrations under a single command in the de-escalation phases of the coronavirus.

The range of possibilities has been enormously opened and the options for public-private collaboration go far beyond the classical definition of construction and maintenance of infrastructures and the provision of services. Now any imaginable form of cooperation between the public and private world and in any economic sector can come into play. Brussels has indicated that this must be the way to go to drain the funds from the Recovery Plan to all strata of the economy. But it has also imposed that it be traveled quickly, which is a real challenge for our country.

The public and the private are condemned to understand each other and leaving behind a configuration of the model to which the administrations have only resorted in those cases in which either they did not have sufficient borrowing capacity to finance large infrastructure projects or when they wanted to alleviate the deficit of some investments. «In Spain, the public-private collaboration agreements have obvious chiaroscuro. Although it has been proven with successful projects that have generated a high-impact economic development, characteristic of this model, the processing times are slow, thus posing one of the main challenges for the execution of the funds of the ‘Next Generation EU’ ”, Enrique Gutiérrez, partner of the consulting firm Deloitte, says in an article.

International experience indicates that four private euros are invested in these initiatives for every public euro

The truth is that the hopes that Brussels has placed in this type of alliance are enormous. According to the Recovery, Transformation and Resilience Plan, public-private collaboration is called upon to make European investment amplifier. The numbers are clear: according to international experience, in these initiatives four private euros are invested for every public euro, so that of “the 140,000 million of public origin could multiply their effect by mobilizing a total of up to 500,000 million euros for private sector investment ”, highlights PwC.

Many of the hopes of recovery of the Spanish economy are therefore placed on the multiplier effect of European funds that public-private collaboration can generate. However, as when the first railways arrived, regulatory development is still a huge source of uncertainty, especially for smaller companies, who await the arrival of ‘European manna’ with open arms.

The Government has created the figure of Strategic Projects for Economic Recovery and Transformation, the so-called Perte, reserved for larger projects, with ‘drag potential’ for growth and employment, and in which it hopes to coordinate collaboration between administrations, companies and research centers. This scheme still raises many doubts in the business world, which demands more information and clarity in the procedures so that the discouragement effect does not spread and companies finally choose to withdraw from the process.

Legal security and certainty

The organization directed by Antonio Garamendi works against the clock so that the arrival of the funds does not fall on deaf ears. «It is important that the Government advance in the realization of the Perte so that companies have legal certainty and certainty about how they can participate and contribute to transform our production model within a great country initiative, “says Luis Socías, head of the employer’s European Projects Office.

The employer insists that it is now urgent to accelerate the operational aspects, that is, to speed up the implementation of the channels and windows for the arrival of aid to the companies. Luis Socías explains that the CEOE has detected that companies demand “clear information regarding the architecture of the funds and their progress and application in Spain” and that is why the employer’s association has launched the digital platform, ‘CEOExEuropa’, to guide to companies, large, small and self-employed on the path to European funds.

But the business manager also points out that it is much still remains to be done in the legislative field. “It is important to reinforce existing public-private collaboration instruments and incorporate new ones. In this it is key to unblock the processing as a bill of the royal decree that regulates the execution of the Recovery Plan, “he explains. “We want to move towards private-public collaboration, due to the weight and importance of private investment in these processes,” says this manager, who insists on the importance of properly monitoring the use of funds. Last Tuesday the employers shared this concern with the European Commissioner for Budgets, Johannes Hahn, in a meeting at the CEOE in which the community manager explained the axes of the package of European budgetary measures to mitigate the effects of the Covid crisis and heard first-hand the opinions and concerns of the companies.

In addition to the Perte, the Government has created other figures to try to strengthen ties between the public and private world. It is the case of the clusters formula With regard to the presentation of aid applications, which allows private companies to associate with institutions such as universities or innovation centers. The hand has also been opened to contracting the concession of works or services to a mixed economy company, that is, of public and private capital.

Ideological misgivings

Although in Spain the model that combines the public and the private is not seen with good eyes among some economic actors, the truth is that it has been very successful in other countries, especially the Anglo-Saxon world, also in France and Germany. “There is less distrust towards this form of cooperation,” explains Luis Socías, who does not deny that the scant weight that public-private collaboration has today in Spain is related to certain ideological positions that view with suspicion any model that implies a certain privatization of the public activity.


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