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.

Related Content

  • September 29, 2017
    Monetising time savings makes toll roads financially stack up, says research
    Putting a financial value on the savings from traffic congestion, noise and air pollution as a result of toll roads and tunnels will make large infrastructure projects more cost effective, according to a new study by Australia’s Queensland University of Technology (QUT). Sae Chi, from the university’s Science and Engineering Faculty, has compared the financial and economic cost of public and privately operated toll roads and tunnels, and found the net impacts to the community should be taken into account
    Read More
  • February 2, 2012
    Carbon finance delivers critical support to mass transit schemes
    David Crawford investigates carbon finance in transport. World Bank carbon finance grants are delivering critical support to major mass transit deployments in emerging and developing economies. Only recently operative in the transport sector, the Clean Development Mechanism (CDM, see panel) is designed to generate additional income streams and improve internal rates of return on projects funded from public- and private-sector sources.
    Read More
  • October 19, 2015
    Authorities select enforce now, pay later option
    Outsouring of enforcement services is on the increase internationally as highway and traffic authorities seek further support in resources and expertise from the private sector. Jon Masters reports. Signs of a significant company making moves into a new market can usually be read as indication of likely growth in that particular sector. Q-Free’s expansion from tolling operations into general traffic enforcement could be viewed as surprising as it is moving into what are relatively mature and consolidating m
    Read More
  • January 10, 2017
    Toll roads important to Trump’s infrastructure plan
    According to The Hill, US toll roads may surge under a US$1 trillion infrastructure proposal being floated by Donald Trump. The president elect’s idea for rebuilding the nation’s roads and bridges relies on private companies instead of the federal government to back transportation projects. Experts believe this means investors will be attracted to projects that can recoup their investment costs using some sort of revenue stream, such as through tolls or user fees. “If he moves forward with an infrastr
    Read More

Highlighted Content