A few days ago, I talked about the smallest PPP in the world.

It’s in Poland.

12.000€.

Probably quite unknown.

There are another one… this time famous.

Small building.

Small investment.

Small transaction costs.

Sorry.

That last one was a joke.

Scotland.

2002

Audit Scotland reviewed six school PFI projects.

For Glasgow, it reported around £12 million in combined public and private sector set-up and advisory costs.

Against £212 million in construction.

For West Lothian?

Around £2 million.

Against £26 million in construction.

The auditors identified the pattern:

As projects became smaller, those costs tended to become a proportionately larger burden.

Beautiful.

Oh, my god… what studies and reports that we pay with taxes…

Anyway.

The project went on a diet.

The transaction machinery kept ordering dessert.

Now imagine telling taxpayers:

“We’ve chosen a sophisticated delivery model.”

Lovely.

How sophisticated?

“Well, we need lawyers.”

Naturally.

“Financial advisers.”

Of course.

“Technical advisers.”

Very sensible.

“Lenders’ advisers.”

Because apparently our advisers need supervision.

“And a financial model.”

Excellent.

Does the model have more cells than the school has pupils?

Don’t answer that.

It was another joke.

A smaller project doesn’t automatically come with proportionately less work.

Nor smaller invoices.

So everyone keeps asking me:

What is the minimum size for a PPP?”

Twenty million?

Fifty million?

One hundred million?

Wonderful.

In which currency?

Which market?

Which structure?

With what procurement costs?

And what benefits compared with the alternatives?

Of course… Silence.

But very senior silence.

The question matters because you can spend months preparing a deal before discovering that its economics never justified the machinery.

By then, you have a team.

A timetable.

A public announcement.

And a board asking why nobody raised this earlier.

You can’t pay an adviser with:

“But the minister liked the concept.”

I suspect people have tried.

This is why I created:

​Minimum Size for a PPP

For the moment before you commit people, money and your own credibility to developing the deal.

The aim is to ask the size question while you still have choices.

​Minimum Size for a PPP ​

Better to have the answer before you’ve spent the money.

P.S. Small infrastructure can deliver enormous public value.

It still needs a delivery model whose appetite matches the meal.

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