How PPPs can improve funding of transport infrastructure

The “Better Regulation of Public-Private Partnerships for Transport Infrastructure” report just released by the International Transport Forum at the OECD looks at public-private partnerships (PPPs), which have become an important tool for governments to attract private finance for infrastructure investments. In the face of tight budgets, PPPs are seen as a means to maintain transport investment and limit public spending at the same time.
October 15, 2013 Read time: 2 mins
The “Better Regulation of Public-Private Partnerships for Transport Infrastructure” report just released by the 998 International Transport Forum at the 7353 OECD looks at public-private partnerships (PPPs), which have become an important tool for governments to attract private finance for infrastructure investments. In the face of tight budgets, PPPs are seen as a means to maintain transport investment and limit public spending at the same time.

Experience with PPPs has been mixed, however. Some transport PPP projects have delivered major cost savings, many others have exceeded their budgets. PPPs are prone to overestimating revenues from the investment, and the associated risks often fall on the taxpayer when projects run into financial difficulty.

The report examines the nature of risks and uncertainties associated with different PPP types and looks at the practical consequences of transferring risks to private partners.  It assesses the fiscal impact of PPPs and discusses budget procedures and accounting rules and reviews the relative merits of tolls, availability payments and regulated asset base models.

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