fiscal, monetary and other economic policies to pursue objectives for the control
of inflation, unemployment, etc.
Thus, in contrast to the private sector, the main methods of public sector investment are
• via projects which are wholly public sector-financed,
• via projects which are financed by both the public and private sectors and
• finally via projects which are private sector investments but which are eligible for
public sector investment incentive grants.
The aims of public sector investment include provision of goods and services
which have significant public benefits, but which might not be profitable enough to
attract private sector investment. Public sector investment may also be focused on
projects aimed at the economic development or regeneration of a particular area.
Many public sector investments are made for reasons of wider public benefits and
thus private sector methods of appraisal are inappropriate. In such cases cost-benefit
analysis provides a more useful method of project appraisal. The essential details are
that all the costs and benefits of a project are identified and weighed up, including
social as well as private ones.
Mrs. Thatcher (former UK Prime Minister) was adamant that the Channel Tunnel
would be built using private funds or not at all. And so it was.
Yet the Channel Tunnel project also demonstrates the shortcomings of such a
policy. The French rail link has been upgraded using public funds, resulting in a fast,
efficient journey from Paris to the tunnel at around 185 mph. However, Eurostar
trains have to brake sharply to around 60 mph when they enter the British rail link to
Waterloo. Lack of private or public funding has meant the track has not been
upgraded, until the early years of the new millennium, to match the French link.
18.12.3 Taxpayer Pays for Better Service
In principle, the BOT approach may be applied in many sectors, if not all. Apparently, the private sector with better management brings out the same product or
service at a cheaper cost.
It should be clear, however, that, unless there was massive wastage when the
service was being produced by government, the only way to reduce costs will be
through a reduction in personnel.
As an argument, why not apply BOT to a maximum number of sectors, so as to
obtain a maximum number of redundant workers. At that moment, (all sectors are
now running at full efficiency and therefore do not need any more workers) the only
way to avoid social problems is for the government to re-employ all those who have
been laid off, albeit in jobs, ministries, parastatal bodies (e.g. Quatre jours à Paris).
And here again, someone will cry at inefficiency in the public sector.
18.12 Applicability of BOT in Mauritius
531
of inflation, unemployment, etc.
Thus, in contrast to the private sector, the main methods of public sector investment are
• via projects which are wholly public sector-financed,
• via projects which are financed by both the public and private sectors and
• finally via projects which are private sector investments but which are eligible for
public sector investment incentive grants.
The aims of public sector investment include provision of goods and services
which have significant public benefits, but which might not be profitable enough to
attract private sector investment. Public sector investment may also be focused on
projects aimed at the economic development or regeneration of a particular area.
Many public sector investments are made for reasons of wider public benefits and
thus private sector methods of appraisal are inappropriate. In such cases cost-benefit
analysis provides a more useful method of project appraisal. The essential details are
that all the costs and benefits of a project are identified and weighed up, including
social as well as private ones.
Mrs. Thatcher (former UK Prime Minister) was adamant that the Channel Tunnel
would be built using private funds or not at all. And so it was.
Yet the Channel Tunnel project also demonstrates the shortcomings of such a
policy. The French rail link has been upgraded using public funds, resulting in a fast,
efficient journey from Paris to the tunnel at around 185 mph. However, Eurostar
trains have to brake sharply to around 60 mph when they enter the British rail link to
Waterloo. Lack of private or public funding has meant the track has not been
upgraded, until the early years of the new millennium, to match the French link.
18.12.3 Taxpayer Pays for Better Service
In principle, the BOT approach may be applied in many sectors, if not all. Apparently, the private sector with better management brings out the same product or
service at a cheaper cost.
It should be clear, however, that, unless there was massive wastage when the
service was being produced by government, the only way to reduce costs will be
through a reduction in personnel.
As an argument, why not apply BOT to a maximum number of sectors, so as to
obtain a maximum number of redundant workers. At that moment, (all sectors are
now running at full efficiency and therefore do not need any more workers) the only
way to avoid social problems is for the government to re-employ all those who have
been laid off, albeit in jobs, ministries, parastatal bodies (e.g. Quatre jours à Paris).
And here again, someone will cry at inefficiency in the public sector.
18.12 Applicability of BOT in Mauritius
531