Better Regulation of Public-Private Partnerships for Transport Infrastructure
Many governments seek to attract private finance for infrastructure through public-private
partnerships (PPPs) in order to maintain investment at the same time as limiting public
spending. Experience with PPPs has, however, been mixed. Some transport PPP projects
have delivered major cost savings but many more have exceeded their budgets. PPPs
are prone to overestimating revenues and when projects run into financial difficulty,
risks have a tendency to revert to the
taxpayer.
The report examines the nature of risks and uncertainty associated with different
types of PPP project and the practical consequences of transferring risks to private
partners. It assesses the fiscal impact of PPPs and discusses budget procedures and
accounting rules to limit the public liabilities they can create. The report also
reviews the relative merits of tolls, availability payments and regulated asset base
models for attracting finance for public infrastructure from private investors on
a sustainable basis.
Published on September 26, 2013Also available in: French