The Economics of Public-Private Partnerships
Cambridge University Press, Sep 15, 2014 - Business & Economics - 176 pages
Governments typically build and maintain public infrastructure, which they fund through taxes. But in the past twenty-five years, many developing and advanced economies have introduced public-private partnerships (PPPs), which bundle finance, construction, and operation into a long-term contract with a private firm. In this book, the authors provide a summary of what, they believe, are the main lessons learned from the interplay of experience and the academic literature on PPPs, addressing such key issues as, when governments should choose a PPP instead of a conventional provision, how PPPs should be implemented, and the appropriate governance structures for PPPs. The authors argue that the fiscal impact of PPPs is similar to that of conventional provisions and that they do not liberate public funds. The case for PPPs rests on efficiency gains and service improvements, which often prove elusive. Indeed, pervasive renegotiations, faulty fiscal accounting, and poor governance threaten the PPP model.
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accounting assets availability contract availability payments awarded balance sheet bear bridges budget capital cash flow Chapter Chicago Skyway competitive auction concession contract concessionaire construction consumer surplus countries credit rating agencies debt discounted revenue Dulles Greenway economic efficiency gains endogenous risks Engel equity Eurostat example facility firm’s fiscal fixed-term contract franchise holder funds Galetovic government’s guarantees Guasch highway concessions incentives increase infrastructure projects investors ment million moral hazard ofthe operating optimal contract percent planner’s PPP contract PPP premium PPP projects PPP unit present value Private Finance Initiative private financing private firm problem procuring authority project finance proposal public provision public sector PVR auction Quanzhou reduce regulatory takings risk premium Ryrie Rules service quality shadow tolls spending sponsor standards subsidies taxpayers term tion toll revenue toll road traditional provision United Kingdom upfront investment user fee revenue white elephants winning bid Yescombe