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Public-Private Partnerships
in Transport: Unbundling
Prices from User Charges

2

Public-Private Partnerships
in Transport: Unbundling
Prices from User Charges

José Manuel Vassallo

Universidad Politécnica de Madrid

Working Group Paper
2019

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Cite this work as: Vassallo, J. (2019), “Public-Private Partnerships in Transport: Unbundling Prices from
User Charges”, Working Group Paper, International Transport Forum, Paris.

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Foreword

Transport infrastructure is a major enabler of economic development. In the drive to refurbish or build,
governments worldwide have turned to the private capital market for financing. The primary narrative
behind this push is the huge stocks of private capital that are available, while public financing capabilities
are said to be limited and insufficient.
The almost exclusive vehicle of private investment in transport infrastructure, including social
infrastructure, is Public-Private Partnerships (PPPs). In the context of PPPs, two important aspects havereceived little attention.
First, sufficient attention has not been given to the role of suppliers. The focus of governments andIntergovernmental Organisations has been on resolving the challenges to private investment from theviewpoint of investors: reducing the uncertainty they face and enabling them to price risk more
efficiently by establishing infrastructure as an asset class.
However, looking only at investors gives an incomplete view of the total cost of the risk transferred fromthe public to the private sphere. In PPPs, investors transfer some of the major risks they are not
comfortable bearing to design, construction, maintenance, and operations contractors.
Suppliers, too, face uncertainties and are unable to efficiently evaluate price risk. In such cases, the basecost of the initial investment – and of subsequent services – may be much higher than they might havebeen, and not just the cost of their financing.
Uncertainty arises from the difficulties to accurately estimate the cost of construction, maintenance,
operations, and financing. But it also stems from “unknown unknowns” (the so-called Knightian
uncertainty). For instance, changes in weather patterns or paradigmatic technological shifts, the timing
and impact of which are unclear, will influence what infrastructure is needed and where.
So what can policy makers do to reduce the cost of inefficient risk pricing of suppliers? Where does thisput PPPs? How can public decision makers reconcile long-term uncertainty with private investment ininfrastructure? Who should bear long-term uncertainty in projects: the public or the private sector?
These were some of the guiding questions for a Working Group of 33 international experts convened by
the International Transport Forum (ITF) In September 2016. The group, which assembled renowned
practitioners and academics from areas including private infrastructure finance, incentive regulation, civilengineering, project management and transport policy, examined how to address the problem of
uncertainty in contracts with a view to mobilise more private investment in transport infrastructure. As
uncertainty matters for all contracts, not only those in the context of private investment in transport
infrastructure, the Working Group’s findings are relevant for public procurement in general.
The synthesis report of the Working Group was published in June 2018. The report is complemented by aseries of 19 topical papers that provide a more in-depth analysis of the issues. A full list of the Working
Group’s research questions and outputs is available in Appendix 1.

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Acknowledgements
The author is particularly grateful to the members of the Working Group for the comments received in
the meetings in Paris. In particular, the author acknowledges Dejan Makovšek (International Transport
Forum) and Daniel Benítez (The World Bank) for the input provided to the final version of this paper.

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Table of contents
Executive summary ............................................................................................................................. 6
Introduction ........................................................................................................................................ 8
PPP models according to the source of revenues ................................................................................ 9User-payment PPP models ............................................................................................................ 10
Budget-payment PPP models ........................................................................................................ 10
Hybrid-payment PPP models ......................................................................................................... 11
Statement of the problem ................................................................................................................. 11
Pricing as a means to reaching allocative efficiency ...................................................................... 12
Some issues of demand risk allocation in PPP models .................................................................. 13
Objective of the paper .................................................................................................................. 14
Unbundling prices to users from PPP charges.................................................................................... 14
Definition of the proposal ............................................................................................................. 14
Governance structure to manage our proposal ............................................................................ 15
Economic foundations that justify our proposal ........................................................................... 17
Potential issues of our proposal .................................................................................................... 18
In which economic sectors could our approach be used?............................................................. 19
Summary and future research ........................................................................................................... 20
Notes................................................................................................................................................. 21
References ........................................................................................................................................ 22
Appendix 1. Research questions and outputs of the Working Group on Private Investment inInfrastructure .................................................................................................................................... 25© OECD/ITF 20195

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Executive summary
What we did
This paper explores the possibility of unbundling user charges from contractor charges in Public-Private
Partnership (PPP) contracts. It analyses the benefits and problems of such an approach based on thetheory of infrastructure economics and defines a potential governance structure to put the model into
effect. It also reviews the infrastructure sectors where its implementation may be particularly
advantageous.
In many PPP contracts, user charges and PPP charges coincide. This causes problems as prices cannot be
used as a means to optimise allocative efficiency and transferring demand risk to PPP contractors creates
wrong incentives with regard to value for money. This paper seeks to identify a way to guarantee thatprices for users are set according to allocative efficiency principles aimed at maximising social welfare,
while contractor charges are set in order to maximise value for money.

What we found
Implementing a model that unbundles user charges from PPP charges is one way to improve theperformance of traditional PPP approaches. User price is the fare that is charged to the final client of theinfrastructure. PPP charges are the fees set to remunerate the PPP contractor. In an availability payment
approach, for instance, the revenue received by the contractor will depend on how the availability
indicators and the payments associated with them are established in the contracts.
Such a model is based on two economic principles. Firstly, pricing users is crucial beyond raising money
to fund infrastructure. Its role is also to influence user behaviour in a way that leads to internalise
externalities and promote social and distributional policies. Secondly, the charging approach set in the
PPP contract determines the revenues of the PPP contractor and therefore has a great influence on
incentives and risk allocation, and ultimately on value for money.
Unbundling user charges from PPP charges allows more flexibility in setting user charges over the life of
the contract. At the same time, the private sector will be allocated those risks that it can manage, thus
fostering value for money outcomes. This, in turn, will reduce opportunistic renegotiations and optimism
bias in demand forecasting.
By addressing the issue of unbundling pricing policy from cost recovery, it also addresses uncertainty andother issues on the demand side. Challenges on the cost side are not attended to, however, as the lifecycle cost continues to be determined through a single competition for the contract. In that sense, as asolution to the challenges of the PPP model, the unbundling model could be considered as situated halfway between the PPP and a fully-fledged Regulated Asset Base (RAB) model.

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What we recommend
Create an infrastructure fund to ensure that revenues are used correctly when implementing the model
The funds collected from user charges and other sources should be pooled in an infrastructure fund. The
use of the fund’s resources should be defined by law. Ideally, the revenue from user charges should beenough to fund all the projects in a particular area of infrastructure (e.g. a motorway network) without
the need for government subsidies. In some cases, subsidies may be necessary, however, because
efficient user charges are not enough to fund the whole system. Another reason might be if thegovernment decides to implement lower prices for political reasons.
Manage individual Public-Private Partnership projects through a specialised agency
Projects within a specific pool should be managed by private sector companies through individual PPP
agreements. The contracting party on behalf of the government should be a specialised PPP agency. Thismight either be in charge of a specific type of projects or oversee all types of PPP projects in a country or
region. For each individual contract, its separate PPP agreement will specify the payment mechanism(PPP charge) necessary for the contractor to recover costs. This charge should be set so as to incentivise
the private partner to optimise value for money. PPP charges will depend mostly on performance,
availability and the marginal cost of usage.
Be thoughtful in implementing the unbundling of user charges from PPP charges
The unbundling model has advantages, but also some downsides that need to be mitigated. Its model
assumes that the government will set the right user prices from an allocative efficiency viewpoint. Yet
the experience demonstrates that governments’ motivation to set user charges is often driven more bypolitical than efficiency considerations. Moreover, changes of government may prompt legal
amendments aimed at reducing user charges or devote resources managed by the infrastructure fund toother goals. This may indirectly affect PPP contractors, insofar as the viability of the ultimate source
guaranteeing the payment of the PPP fee charges agreed in the contract is crucial for them.
Use the unbundling model for sectors with the right characteristics
The value of the unbundling model depends very much on the specific characteristics of the industry. It
will provide more value to projects with high externalities and where congestion is caused by theirutilisation. It will also be beneficial where the government wants to set homogenous prices across theterritory for infrastructure use and projects where the private sector has little influence over demand
estimation and attraction. Finally, unbundling makes sense for infrastructure facilities within a network
where demand flows are complementary or substitutes and which therefore lends itself to an integrated
pricing policy. The management of the urban transport system within a metropolitan area seems to be
especially suitable.

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Introduction
The relationship between infrastructure and economic development is well established and shows that
infrastructure may positively contribute to economic growth and productivity (Egert, 2015; Estache andGarsous, 2012; Garsous, 2012). Public-private partnership (PPP) is an acknowledged model to deliver
privately financed infrastructure, and encourage private sector technology and innovation to improve
public services’ efficiency and quality.
There is no single internationally accepted definition of public-private partnership. Bovaird (2004)
defines PPPs in a broader sense as “working arrangements based on a mutual commitment (over andabove that implied in any contract) between a public sector organisation with any organisation outside of
the public sector”. Klijn and Teisman (2003), in turn, define PPPs in a more specific way as “co-operation
between public and private actors with a durable character in which actors develop mutual products
and/or services and in which risks, costs and benefits are shared”. A recent update of the Public Private
Partnership Reference Guide conducted by the World Bank (2017) defines PPPs as: “a long-term contract
between a private party and a government entity, for providing a public asset or service, in which theprivate party bears significant risk and management responsibility and remuneration is linked toperformance”.
One of the crucial challenges of PPP nowadays is to assess its effectiveness compared to alternative
procurement methods (Debadutta, 2016). In this respect Hart (2003), Nobel Prize laureate, suggests thatthe choice of PPPs depends on whether the outcome is observable and enforceable. PPPs will definitely
be an advantageous option when they produce a synergy value greater than the value that any party —public or private — can provide alone (Weihe, 2008). As a consequence of that, over the last few
decades, PPPs have gained popularity for delivering infrastructure in many countries under the
expectation of producing greater value for money than traditional procurement approaches.
There are several reasons why PPPs may be beneficial for the government: the fact of being acompetitive and cost-attractive alternative to traditional public procurement (value for money creation);
the fact that they bring in proven project management expertise that frees up time and resources ofpublic authorities that may concentrate on more pressing policy issues; and, given the lack oftransparency of public accounting, the fact that it facilitates the public sector to undertake projects
without increasing government debt or triggering the need for tax increases (Nisar, 20017; Lawther,
2000; Osborne, 2000).
Many countries and regions, especially those subjected to large budget constraints, have relied on PPPs
to circumvent budgetary constraints. However, the incentives to produce value for money by the private
sector through the management of the whole life-cycle is often mentioned by many authors as the mostimportant benefit of PPPs (Nisar, 2007; Morallos et al., 2009). Value for money is expected to happen
insofar as risks are allocated to the party best able to manage and price them, which means that thisparty needs to have a certain ability to quantify, influence and mitigate these risks. However, someauthors, such as Hodge and Greve (2007), question that PPPs are always more effective than otherconventional procurement approaches, and draw attention to the need of strengthening ex-post
evaluations.
In this respect, a set of common shortcomings is found in the literature on PPPs such as opportunistic
behaviour leading to high levels of renegotiations; unprotected public interest; asymmetries of
information that might lead the PPP contractor to capture the procuring authority; biased traffic
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forecasts; rigidity of the contractual framework — in particular in the setting of prices — which hinders
the possibility of managing demand; and the incentive to over-committing budgetary resources for
future generations when PPPs are treated off balance of the government budget.
Different PPP approaches have been implemented around the world to build/upgrade, maintain,
operate, and finance new or existing infrastructure facilities. These PPP approaches can be classified inmany ways. One of them is according to where the revenue comes from: either from fares to the users,from budgetary resources or a combination of both. In the budget-payment PPP model, taxpayers
instead of users are the ultimate infrastructure payers. In this case the PPP contractor may beremunerated either in terms of demand (shadow-fares or tolls) or performance (lane availability, state of
the pavement, and so on).
The aim of this paper is to contribute to the body of knowledge with the definition of a new PPP
approach that proposes to unbundle the pricing policy to the users from the charges that PPP
contractors receive for managing a certain infrastructure over its life cycle. The idea behind thisapproach is to guarantee that the pricing policy to the users is set according to allocative efficiency
principles aimed at maximising social welfare, while contractor charges are set in order to maximise
value for money. For the purpose of this paper, user price is defined as the fare that is charged to thefinal client of the infrastructure (a single person, a vehicle, a group of people or a company, etc.) for theservice provided to utilise the facility. Contractor charge, however, is defined as the fee set to
remunerate the PPP contractor for the service rendered by it according to a set of pre-established terms.
For instance, in an availability payment approach the revenue received by the contractor will depend on
how the availability indicators and the prices associated to it are established in the contracts.
This paper explores the possibility of implementing a new model based on unbundling user charges fromcontractor charges in PPP contracts, analyses the benefits and problems of the model on the basis of thetheory of infrastructure economics, defines a potential governance structure to put the model into
effect, and studies the infrastructure sectors where its implementation may be more advantageous.

PPP models according to the source of revenues
According to where the revenues of the PPP contractor come from and how they are established in thecontract, PPPs can be classified in the following categories:

User-payment PPP models: In this approach the bulk of the revenues comes from fares charged
to the users, even though additional revenues may be produced from other sources — such as,
for instance, value capture rents or other business opportunities linked to the infrastructure(commercial areas and so on). In many cases the use of this model presupposes that the projectwill be viable without any kind of subsidy.

Budget-payment PPP models: In this approach the users are not charged, at least directly, for theservice that the PPP contractor provides to them. Instead, the bulk of the revenue comes fromsubsidies that are paid by the government in terms of:© OECD/ITF 20199

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oDemand: In this model the contractor will be paid according to the volume of users. Thisapproach is usually known as shadow-toll or shadow-fare model.

oAvailability or performance: In this approach, the contractor will be paid in terms of a setof performance indicators related to the service provided.

o

A combination of demand and performance.

Hybrid-payment PPP models: In this model the revenue will come partly from the users andpartly from government subsidies. The subsidies may be provided in different ways such as:
upfront lump sums, contributions per level of utilisation, contributions in terms of the fulfilmentof a set of performance indicators, etc.

The specific characteristics of these approaches are analysed in greater detail below.

User-payment PPP models
According to Yescombe (2007) PPP programmes in different countries have usually begun with toll-road
concession models. The self-financing nature of such models makes them immediately attractive forgovernments in comparison to other models as a mechanism to circumvent budgetary constraints. In
these types of contracts, which in many places are known as concession agreements, user fares are set
as a means for private contractors to raise resources to recoup construction, repair, maintenance andoperation costs during the lifespan of the contract. User charges, in this model, are usually set andregulated by the contracts through price caps that are updated on a yearly basis depending on inflationand productivity indexes. This fact makes the pricing structure approach rather inflexible, which limits
the possibility of using prices for behavioural purposes.
Demand risk is often allocated to the contractor in this model, even though in some cases the contracts
include approaches to share this risk with either the government or future users (Vassallo, 2006).
According to Evenhuis and Vickerman (2010), though transferring demand risk provides an incentive forthe private party to encourage service to attract demand, the allocation of demand risk on the private
party side is only reasonable if the PPP contractor is able to have a positive influence on demand throughthe quality of service provided, the management of prices and publicity. However, the ability of a PPP
contractor to attract demand varies a lot depending on the characteristics of the infrastructure. The
larger the rigidity of prices, and the lower the perception that users have of the quality of service thelower the ability of the private sector to influence demand.

Budget-payment PPP models
Unlike user payment models, in budget-payment PPP models the revenue comes from the generalbudget of the government, thus the infrastructure is not ultimately funded by users but rather by
taxpayers. The private contractor is entrusted with the design, construction, maintenance and operationof a certain infrastructure for a period of time while the government commits itself to pay a regular fee
to the PPP contractor according to what the contract stipulates.
Budget-payment PPP models allow governments to defer payments forward into the future. This
strategy has been used by some governments to increase their investment capacity in the short term at
the expense of committing future budgetary resources in the long term. This fact became problematic incountries such as Spain and Portugal where, because of the economic recession, the macroeconomic

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scenario turned out to be much worse than originally expected and governments experienced serious
problems to afford their pre-established commitments (Ortega, Baeza and Vassallo, 2016).
These models have other weaknesses. The main one is that pricing can no longer be used as amechanism to influence demand and internalise externalities. For example, in the case of roads,
overcapacity cannot be managed via tolls which usually lead to an un-optimal welfare distribution.
Moreover, under purely budget-payment PPP models, taxpayers are less aware than users are ofchanges in the contract — such us fare increases or terms extensions — so the government and the PPP
contractor can easily agree on contract renegotiation that are not noticeable by the users of theinfrastructure.
As it was previously advanced, budget-payment PPPs are usually classified into two groups: shadow-faremodels and performance-based models (usually known as availability-payment models). Under the
shadow-fare approach, payments are made by the government to the PPP contractor in terms of
demand. Like user-payment PPP models, demand risk is mostly transferred to the PPP contractor, eventhough it is usually mitigated through a set of toll bands defined in the contract in such a way that lower
bands are associated to greater fares and vice versa.
In the performance-based approach demand risk is not transferred to the PPP contractor, who is paid
instead on the basis of a set of performance-based indicators established in the contract. These
indicators intend to measure the availability of the infrastructure and the service quality provided by theprivate developer to the user and the society. Under this approach, the PPP contractor is encouraged toprovide an uninterrupted service with high quality standards and maintain complete availability of theinfrastructure.
Under availability approaches, if the service is not provided according to the stated quality standards,
penalties are usually applied. Bonus payments may apply if quality standards surpass the reference
threshold.

Hybrid-payment PPP models
In hybrid models, the payment to the PPP contractor depends on the service provided, the availability
and the usage of the infrastructure (Aziz, 2007). There are several types of hybrid models. In some ofthem the government set charges to the users, and pays the PPP contractor on the basis of a
combination of demand and availability. In others, users are not charged, but the government still payson the basis of demand and availability relaying on the future budget. In others, the PPP contractor
charges prices to the users and receives additional subsidies based on availability.

Statement of the problem
As previously mentioned, most of the PPP approaches developed to date either set prices to the users in
the contract as the main source of revenue for the PPP contractor, or are based on direct payments from© OECD/ITF 201911

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the government to the PPP contractor in such a way that the user does not have to pay, at least directly,
for the service provided.
These approaches face several limitations in trying to maximise efficiency. On the one hand, prices are a
key factor to influence the behaviour of the users to internalise externalities and manage demand. On
the other hand, it is not clear that demand provides the right incentive to the PPP contractor to manage
the infrastructure in the right way. The objective of the PPP operator is to optimise its revenue, which
can be at odds with the efficient use of infrastructure. This section outlines the statement of the problem
that justifies the adoption of a new model.

Pricing as a means to reaching allocative efficiency
The academic literature about pricing and welfare is vast and diverse. After years of research, pricing has
been recognised as an effective mechanism to influence the behaviour of users with the aim ofinternalising externalities and making a most rational use of infrastructure facilities and the services
associated to them (Chung and Recker, 2012). One of the main conclusions in the literature is that thefirst-best solution, known as the one that maximises welfare, does not necessarily produce enoughresource to finance all infrastructure costs (Hau, 1992). To solve this problem authors such as Ramsey(1928) have proposed second-best solutions incorporating a self-financing constraint in the objectivefunction.
In the last few years, research about optimal infrastructure pricing has become much more complex andsophisticated. Even though most of the contributions come from research applied to road infrastructure,
the main conclusions may be easily generalised to any type of infrastructure. Overall the main resultsfrom the body of knowledge are that optimal pricing depends on many aspects such as: thecharacteristics of the network and how competing alternatives are priced (Verhoef, 2002; Verhoef, Kohand Shepherd, 2010; Xu, Ordóñez and Dessouky, 2015), the characteristics of the users (Ferrari, 2005;
Verhoef and Small 2004), the constraints set in the objective function (Yang and Zhang, 2003; Yin andYang, 2004); income heterogeneity of the users (Ortega, Vassallo and Pérez, 2018), quantification andvaluation of welfare and externalities (Mayet and Hansen, 2000).
Apart from efficiency, user pricing has also faced a serious problem of acceptability (Dieplinger and Fürst,2014). High prices could harm low-income people in such a way that their opportunity to participate in
the society might be diminished (Kenyon et al., 2003). Even though there may be relatively simple ways
to compensate the less wealthy community (e.g. tax breaks), pricing is still an unpopular measure
because people believe they already pay enough taxes. Such reasons explain why many governments
have been reluctant to price infrastructure and hence, in the last few years, budget-PPP models haveflourished (EPEC, 2016).
From this analysis several ideas arose. First, refusing setting prices for the usage of infrastructure may, if
the government is not responsible, impose long-term commitments to future governments that may nothave the financial capacity to comply with them. Vassallo and Pérez de Villar (2010) show how
budget-payment PPP approaches and lack of transparency in public debt accounting can promote
overinvestment in the present at the expense of constraining the government ability to invest in the
future.
A second idea coming out from this analysis is that optimal prices experience a great variation over time
due to changes in the perception of externalities, new competing alternatives, etc. As a consequence of

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that, from the standpoint of allocative efficiency, it would be desirable that prices could be much more
flexible over time in order to adjust to the shifting perception of externalities.
In this respect Clifton and Duffield (2006) showed their concerns about the fact that the rigidity of
PFI/PPP contracts may hinder long-term service changes without risking the integrity established during
the bidding process. It is acknowledged that PPP contracts are incomplete and their renegotiations are
subject to multiple challenges (ITF, 2017). One of the main problems of PPP models nowadays is thelimitation that the rigidity of contracts makes on the necessity to be flexible to adapt infrastructure
management to the evolving needs of society.
The long-term nature of PPPs, and the need to regulate the monopolistic power of the PPP contractor
after the contract has been awarded, requires setting up rigid contracts with fixing price caps andindexing toll prices to inflation. Consequently, the contract itself sets up prices that will not necessarily
be optimal in the future because user perceptions and externality values may vary over the years.
Kaplow and Shavell (1999) argued that it is complicated to define contract agreements to regulate fares
for such a long period of time.

Some issues of demand risk allocation in PPP models
Demand risk allocation is another issue that has to be reconsidered according to past experiences withcurrent PPP models. Requiring the private party to bear the demand risk, in most cases, does notpromote additional value for money, but instead leads to higher financial costs due to the need forcompensation of increased risks (Evenhuis and Vickerman, 2010) and inefficient risk pricing (Makovšek
and Moszoro, 2017). Moreover, for many types of projects the private sector does not have enoughability to rightly estimate traffic evolution over time, neither does it have much capacity to attract users
by rightly managing the project. Chung (2009) mentions that the effort by governments to entice theprivate sector has led to consistent erroneous traffic forecasts across projects. Bain (2009) cited studies
in different countries with traffic deviations over 30% of the traffic expected. Vassallo et al. (2011) pointout that allocating the bulk of traffic risk to the concessionaire, without implementing any traffic risk
mitigation mechanisms, has been one of the main causes that has led to the bail out of concession
projects in Spain.
PPP projects where demand risk has been fully transferred to the private sector seem to be renegotiatedmore often than other types of PPP approaches. Baeza and Vassallo (2010) provide evidence of frequent
renegotiations in concession contracts in Spain where demand was fully allocated to the private
contractor. According to Guasch et al. (2007; 2008) the high rates of contract renegotiation have raised
serious questions about the viability of the PPP model to attract private participation for financing
infrastructure in developing countries. According to de Brux (2010), there is evidence in the literaturethat suggests that parties in a PPP contract are often looking for individual and short-run benefits when
they renegotiate PPP agreements, and in most of them, some social surplus may be destroyed.
Unfortunately, decisions are often taken at the expense of users or taxpayers who usually end up bearing
the burden of these kinds of inefficiencies.
Another problem of demand-risk allocation is the scarce influence that the private sector has to manage
usage due to the fact that, for many types of infrastructure facilities, the volume of utilisation is highly
correlated to aggregated macroeconomic variables and the completion with other infrastructure. Thoseare factors over which the contractor has no influence. As a consequence of that, the private operator
may experience windfall benefits or unfair losses that have little to do with its effort to provide a good
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are correctly defined, seem to be much more suitable to encourage the contractor to address its effort
to provide a good service to the user thereby increasing value for money.

Objective of the paper
The issues pointed out above show that there may be room for a new model where, on the one hand,pricing policy to the users is defined according to social objectives; and, on the other hand, charges tothe users are set according to principles aimed at maximising value for money.
The theoretical analysis of this model and its implementation in practice have been scarce. Sierra, Baeza
and Vassallo (2014) studied the theoretical advantages of unbundling tolls from contracts for the case ofroad networks. Regarding practical implementation there are some punctual projects where a similar
model has been implemented. This is the case, for instance, of the Express Lanes project on the I-595
highway in Florida consisting of improving the capacity and operations of the corridor by providing three
additional at-grade lanes in the median of the corridor. To maximise the operational efficiency, the lanes
have tolls at varying rates throughout the day to optimise traffic flow. Florida Department ofTransportation retains control of the toll revenue and toll rates, and pays the contractor a fee in terms ofavailability and performance.

Unbundling prices to users from PPP charges
Based on the problems identified above this section outlines in detail a new infrastructure PPP proposal
founded on the fact that user charges are unbundled from PPP charges.

Definition of the proposal
The model proposed is founded on a set of key principles aimed at circumventing the shortcomings
identified above. The ideas are the following:14



User charges should be set according to allocative efficiency principles and, as a consequence,
are to be flexible over time. Unlike demand-based PPPs, in the new model, user charges will not
be regulated by contracts, but rather will be periodically updated by the government or theentity designated by it. This way, user charges will be changed over time to improve allocative
efficiency and promote sustainability.

Despite the flexibility previously mentioned, user charges should be easy to understand by users
and the society as a whole. Prices have to be defined homogeneously across similar projects.
Similar conditions should be priced in a similar way.



Differences in prices across similar projects will only be justified for reasons of positive
discrimination. For instance, setting lower prices in regions that are clearly poorer than the
country average will be justifiable according to this principle.

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As a consequence of the two previous statements, cross-subsidies among different PPP projects
may occur. For instance, according to this model, a busy road in a wealthy area may
cross-subsidise an unoccupied road in a poor area.



PPP fee charges that determine the contractor’s revenue, and the risk associated to them, haveto be designed to incentivise the contractor to achieve the highest value for money. As aconsequence of this principle, allocating demand risk to the PPP contractor when it has nocontrol over the use of the infrastructure would make little sense. In this case, it may be much
more reasonable to tie PPP charges to performance-based indicators.

The private sector should never bear risks where there is a conflict of interest between private
incentives and social goals. For example, from the social standpoint it will be a reasonablemeasure charging a lower toll to less polluting vehicles. However, if the private sector bears thisrisk, it will have the incentive to ignore pollution in favour of more traffic to increase its profit,
which is clearly against social interests.

The proposal of this paper consists of unbundling the charges determining the payment mechanisms to
the PPP contractors from user charges, which will be set by the government to optimise allocative
efficiency. Similar projects will be grouped in a pool in order that the resources collected in a particular
project will not be necessarily allocated to fund this project. For the sake of homogenisation andcoherence, user charges in new projects requiring large investment amounts will be similar to the ones inthose projects already constructed that require just minor capital investment costs. Each individual
project will be managed through a single public private partnerships awarded to the private operator
that wins each specific tender. This cross-funding approach already occurs in several cases, where agovernment-owned company manages the motorway network (e.g. ASfiNAG in Austria, DARS in Slovenia,
NDS in Slovakia), but they do not necessarily use the PPP approach to manage stretches of the network.
This model requires at least a preliminary definition of the governance structure necessary to put inplace the ideas outlined in this subsection. A more detailed definition of the governance structure is
explained below.

Governance structure to manage our proposal
The institutional framework and relationships among different stakeholders in this new model is
described in Figure 1. The different colours of the figure have different meanings: The blue boxes
represent administrative units of the government. The orange boxes represent the specific entities,
either government-owned or private, necessary to build the institutional framework described in thispaper. The red circle represents the private contractor that was awarded a specific PPP contract. The
yellow circles show funding sources that include user charges and other potential sources such as
government subsidies, value capture rents, and commercial revenue. Finally, the green boxes describe
the criteria used to set prices and PPP charges.
According to the principles pointed out in the previous section, maximum prices will be periodicallyestablished according to a set of rules proposed by the governmental unit in charge of the infrastructure
facilities and approved by the Ministry of Finance and submitted to the supervision of an independent
regulator. The criteria to set user charges include:higher prices for higher externalities producedhigher prices for using the facility when it is congested© OECD/ITF 201915

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higher prices to compensate the marginal costs of usage

flat rates may be set to encourage the use of infrastructure in periods of overcapacity. This isintended to encourage a more balanced use of the infrastructure network over time.
Figure 1. Description of the new model
Other revenue
sources(subsidies, etc.)

Entity in chargeof managing the
fund

Users
USER PRICES- Cost incurred- Externalities- Congestion

SECRETARY OF
THE TREASURY

PPP CHARGES

GOVERNMENTUNIT IN CHARGE OFTHE
INFRASTRUCTURE

Infrastructure
Fund- Availability- Performance- Marginal cost of usage

PPP Contractor
PPP Agreement

PPP AGENCYINDEPENDENTREGULATOR

Prices may be collected by the government, by a public authority, or through a franchise with a privatecompany. Another alternative may be to entrust to each PPP contractor the task of revenue collection.
The decision will depend on the specific characteristics of each project.
The funds collected from user charges plus other additional sources (subsidies, etc.) will be allocated to
an infrastructure fund. The use of the resources of the fund will be approved by the law. Ideally, therevenue from user charges should be enough to fund all the projects of the pool without the need ofgovernment subsidies. However, in some cases subsidies may be necessary because efficient user
charges are not enough to fund the whole system, or because the government decides to implement
lower prices for political reasons.
If the government decides a full cost recovery strategy, a rate would first be set for the projects in theportfolio. The base average would then be adjusted on individual sections following efficient pricing
principles to the extent where these do not blow the global revenue constraint of the portfolio. The
infrastructure fund will be a special purpose vehicle with the goal of safeguarding the revenue comingfrom user charges and other sources, and disbursing resources to make payments to PPP contractors.
The use of the resources of the fund will be approved by the law. However, they will be primarily utilisedfor paying PPP contractors and promoting measures that contribute to minimising the environmental
effects caused by those projects. The infrastructure fund will be administrated by a management entitythat will be supervised by the Ministry of Finance. This company will be entrusted with the management
and administration of the infrastructure fund in accordance with the law. The management entity cannot
decide on the resources allocation policy of the infrastructure fund. Nevertheless, it may conduct

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financial operations such as revenue securitisation, etc., although these operations will require approvalby the Ministry of Finance. The fact that cost recovery of the private operators will happen through anintermediate fund rather than directly from the users should, in the long run, have little impact on thecost of private financing (Francis and Elliot, 2018).
Both new and existing projects within the pool will be managed by private sector companies throughindividual PPP agreements. The contracting party on behalf of the government will be a specialised PPP
agency, which can be in-charge of a specific type of projects or of all types of PPP projects promoted in acountry or region. For each individual contract, its specific PPP agreement will specify the payment
mechanism (PPP fee charge) necessary for the PPP contractor to recoup its costs. The PPP fee charge
should incentivise the private sector to optimise value for money. The revenue received by the PPP
contractor through contractual charges will not have to be necessarily related to the revenue collectedfrom the use of this specific project. PPP fee charges will depend mostly on performance, availability andthe marginal cost of usage. The latter point intends to make sure that the PPP contractor has a positive
incentive to attract more demand to the infrastructure it manages. Other aspects such as the public
perception of users, collected through regularly conducted surveys, could be also incorporated within
the PPP charging approach.
The infrastructure PPP agency will be a government-owned company monitored by the unit or units incharge of the types of infrastructure entrusted to it. This entity will be assigned, in strong co-operation
with the government unit in charge of the infrastructure, the preparation of the feasibility study of the
PPP project, the definition of the bidding terms, the technical and economic supervision of the PPP
agreements, the promotion of the project to the private sector, the measurement of performance-based
indicators, the collection and publication of statistics, and the overseeing of the PPP agreements. This
agency should have a team specialised in contracting, finance, procurement and so on. The support ontechnical aspects and operation will be provided by the government unit in charge of the infrastructure.
The governance of this model also includes an independent regulator in charge of representing the users
and the society in the case that the government and the PPP contractor agree to a change in thecontract terms. The regulator may also inform the definition of user charges. This entity will be createdas a public body with its own legal independence and full capacity to act, endowed with its own assets
and governed by the secretary responsible for social policies and consumption. The role of thisindependent regulator will be limited to ensuring transparency about PPPs to the users and the society.
Within its remit, it shall also inform of changes to be conducted to PPP agreements that may affect users
or taxpayers. The PPP regulator does not necessarily have to play the role of incentive regulation as in
the RAB model. The infrastructure PPP agency shall be required to inform the independent regulator of
all possible contract modifications or renegotiations that may have influence on the interests of users or
taxpayers.

Economic foundations that justify our proposal
The new model is based on two fundamental principles of infrastructure economics. First, pricing users is
crucial not just to raise money to fund infrastructure, but also to influence users’ behaviour to internalise
externalities, and promote social and distributional policies. And, second, the charging approach set in
the PPP contract, which determines the revenues of the PPP contractor, has a great influence on
incentives and risk allocation and henceforth on value for money. Unfortunately, in many PPP contracts
developed as of today, user charges and PPP charges have been the same. This fact has caused problems
derived from the impossibility of using prices as a means to optimise allocative efficiency, and from the© OECD/ITF 201917

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wrong incentives that transferring demand risk to PPP contractors has on value for money. In thissection, we explain PPP problems identified by the economic theory that may be partially or totally
solved with the use of this model.
Unbundling user charges from charges in PPP contracts will definitively favour pricing flexibility since user
charges will be set apart of PPP fees. The government will be able to vary prices over the life of thecontract in order to foster allocative efficiency, and promote behavioural measures to mitigate
externalities. PPP contractors will not see their finances being disrupted by user price changes because
the revenue obtained by them will be mostly based on performance and availability, which is strongly
related to their effort to manage the contract in the right way.
According to the model defined in this paper, demand will no longer be the main revenue driver for the
PPP contractor. Consequently, the optimism demand bias is expected to diminish substantially because
inflating predictions will no longer be used by bidders to justify aggressive offers.
As it was shown before, one of the most controversial issues of PPPs is opportunistic renegotiation,
which is directly linked to three aspects: allocation of non-manageable risks to the private sector; designof incomplete PPP contracts that leave many unresolved situations to be dealt with in the future; and,lack of oversight of eventual renegotiations between the government and the PPP contractor. The model
presented here is expected to reduce opportunistic behaviour in several ways. First, the bulk of thecontractor’s revenue will be mostly tied to performance indicators that depend on the effort andmanagerial ability of the private sector. Second, demand risk will only be allocated to the PPP contractor
in a very limited way. And third, the independent regulator will be in charge of making sure that eventual
renegotiations will not harm the interests of users and taxpayers.
Future budget commitments for the government will be reduced with this model because, unlike most of
the availability payment approaches already in place, the revenues to fund the system will ultimately rely
on real user charges rather than on the government budget. Subsidies will only be necessary as long as
prices are not enough to recoup infrastructure costs. However, these subsidies will ultimately depend on
decisions adopted by the government. For instance, if the government decides to set lower user charges,
it will have to offset the deficit of the infrastructure fund with greater subsidies. Similarly, if thegovernment develops a white elephant producing little revenue, it will have to contribute with greater
subsidies to the fund.

Potential issues of our proposal
Despite the advantages previously outlined, this proposal has also some issues that are worth
mentioning. The model is assuming that the government will set the right prices to the users from thepoint of view of allocative efficiency. However, the experience demonstrates that the reasons that movegovernments to set user charges are more political than efficiency-driven. On the one hand, thegovernment may experience real public opposition to price infrastructure projects that were previously
free, or may be subjected to social pressure to reduce user charges for political or electoral reasons.
Moreover, changes in the political parties governing the country may also prompt legal changes aimed at
reducing user charges, or devote the resources managed by the infrastructure fund to other social goals.
This fact may indirectly affect the PPP contractors insofar as the viability of the ultimate source
guaranteeing the payment of the PPP charges agreed in the contract is crucial for them. In a traditionaluser-payment agreement, the government has the prerogative to change the terms of the contract topromote the public interest, but the legislation usually set measures to balance the economics of thecontract to compensate for the impact of these changes.
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Some measures may help to mitigate these problems. The most difficult aspect to control is somehow
making sure that the government sets efficient user charges. A mechanism to mitigate this issue may be
to pass a legal provision requiring that new user pricing schemes have to be validated, or at least
informed, by the independent regulator or by an independent panel of experts with a long track recordin the field. Moreover, the legislation has to establish clearly that if the government decides to reduce
user charges, it will be responsible to endow the infrastructure fund with the necessary resources tocomply with its obligations with the PPP contractors.
Another issue is that even though this approach helps introduce flexibility in the pricing scheme, someother aspects that may be subjected to uncertainty in the future still remain rigid. For instance, therevenue of the PPP contractor depends on performance indicators, but the validity of these performanceindicators may be limited since the requirements of the users and the technology may substantially varyover a long period of time (Winston and Mannering, 2014).
A final issue with these types of agreements is the way in which user charges are set may have
unexpected economic consequences in favour or against the interests of PPP contractors. For instance, if
the government decides to reduce user charges significantly, demand will tend to rise thereby increasing
the cost that the PPP contractor has to incur to comply with the performance indicators. This issue may
be mitigated through a good allocation of these risks in the contract provisions.1

In which economic sectors could our approach be used?
A few final questions arise concerning this model: Is this recommendable for all the infrastructure
sectors? Or, looking at this from a different point of view, which are the specific characteristics of certain
infrastructure sectors that may make this model more suitable for them? Starting with the latterquestion, one could claim that this approach is expected to be more attractive to infrastructure projects
complying with the following characteristics:
Projects with high externalities and congestion caused by their utilisation. In this case, user
charges are definitively a key factor to optimise social welfare.

Infrastructure facilities where the government is interested in setting up homogenous prices
across the territory so cross-subsidies among different projects may be necessary.

Projects where the private sector has little influence over demand estimation and attraction.



Infrastructure facilities within a network where demand flows are complementary or substitute,so a common and integrated pricing policy makes sense. This includes projects wherecompetition from other projects within the network may have a large impact on demand.

Thinking of different types of projects, it seems that this approach may work well for surface transport
projects such as rail and road networks because of their large externalities, potential congestion andtheir network component. The model will be suitable for projects where demand is difficult to predict by
the private sector and is subjected to potential competition with infrastructure belonging to the
network. The management of the urban transport system within a metropolitan area seems to be
especially adequate for this model since an integrated fare policy makes sense, and there are large
cross-externalities across different modes of transport.
This approach may also be interesting for utility projects such as water and sanitation ones, where thegovernment is interested in setting up homogenous prices across the territory and the facilities may be© OECD/ITF 201919

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integrated in a single network. Similarly, the model may be implemented successfully for electricity and,
where the market is not already liberalised, telecom transport networks.
The model does not make sense for PPPs such as prisons, courts, etc.; which by its own nature does not
set prices to final users. It is also not appropriate for PPP projects, such as stadiums, where the effort ofthe contractor has great influence on demand. The same goes for other infrastructure facilities that are
not integrated in a network, such as airports and ports, when these exist in a competitive market. The
model may only make sense for these facilities in cases where a competitive market cannot beestablished and it is in the public interest to establish a homogenous or integrated pricing policy to agroup of facilities.

Summary and future research
Increasing budgetary constraints for delivering infrastructure along with the need to reach greater
efficiency have prompted the boom of different PPP models around the world. Some countries adopted
user-payment PPP models whereby revenues to fund the infrastructure came mostly from users. Other
countries however decided to implement budget-payment PPP models such as shadow-fare oravailability payment approaches. Budget-payment PPPs agreements, especially availability-payment
ones, seem to have worked better in terms of incentives, but they do not include pricing as a means torationally manage the use of the infrastructure.
One way to improve the present performance of the traditional PPP approaches in order to overcome
most of the identified shortcomings may be through implementing a new model, applicable to a pool ofinterrelated projects. This new model would unbundle user charges from PPP fee charges, which will bemostly based on performance, while keeping the revenue collected as the main source for funding PPP
agreements through an infrastructure fund.
Unbundling user charges from PPP contract fees will allow more flexibility in setting user charges while
the private sector will be allocated the risks that it can manage better, thus fostering value for money.
This will reduce opportunistic renegotiations and optimism bias in demand forecasting. The model
addresses the issue of unbundling pricing policy from cost recovery and in that way addresses
uncertainty and other issues on the demand side. It does not yet however address challenges on the costside (life-cycle cost continue to be determined through a single competition for the contract). In thatsense it could be considered half-way to a fully-fledged RAB model.
The current paper is just a first definition of the model, so there are still plenty of detailed issues left for
future research. In this respect, it may be interesting to develop a tool to quantify the social welfare
gained by this approach. A lot of research may also be conducted on mechanisms to guarantee therationality of political decisions in setting user charges. Finally, it might be interesting to study othermeans of making PPP contracts more flexible in other areas such as the definition over time of
performance-based indicators.

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Notes

1 These issues are resolved through periodic resets of the efficiency targets and a duty to ensure cost recovery in the fully-regulated model.
Three papers prepared for the same working group address related issues. Engel, Fischer and Galetovic (forthcoming) discuss the issue of who
should bear the cost of long-term uncertainty. Makovšek and Veryard (2016) explain how the RAB model deals with these long-term rigidities
and Alchin (forthcoming) how the RAB model could be applied to the Australian motorway network.

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Appendix 1. Research questions and outputs of theWorking Group on Private Investment inInfrastructure
Introduction: Getting the basics right
What are the economic characteristics of infrastructure?
What is infrastructure and what are operations? What are
the models of private participation in infrastructure andthrough which significant private investment actually takes
place?

Makovšek, D. (2019), “What is Private
Investment in Transport Infrastructureand Why is it Difficult?”, Working Group
Paper, International Transport Forum,
Paris.

Can private investment improve productive efficiency?
Makovšek, D. (2019), “The Role of Private
Improve project selection? Close the infrastructure funding Investment in Transport Infrastructure”,
gap? Have other positive effects when it is private?
Working Group Paper, International
Transport Forum, Paris.
What have the private investment trends in transport
infrastructure been over the last 20 years? How much ofthat was foreign private investment?

Mistura, F. (2019), “Quantifying Privateand Foreign Investment in Transport
Infrastructure”, Working Group Paper,
International Transport Forum, Paris.

Defining the challenge: How uncertainty in contracts matters
How does uncertainty affect risk pricing? Beyond investors,
do suppliers in PPPs also have issues with risk pricing? How
does its transfer to the private sector affect competition?
What does uncertainty mean for the public vs. private costof financing?

Makovšek, D. and Moszoro, M. (2018),“Risk pricing inefficiency in public–private
partnerships”, Transport Reviews, 38(3),298-321.

Is uncertainty also an issue in long-term
services/operations contracts?

Beck et al. (2019), “Uncertainty in Longterm Service Contracts: Franchising RailTransport Operations”, Working Group
Paper, International Transport Forum,
Paris.

What is the competition for large transport infrastructure
projects in the EU Market? Is there a difference between
traditional procurement and PPPs?

Roumboutsos, A.
(forthcoming),”Competition for
Infrastructure Projects: Traditional
Procurement and PPPs in Europe”,
Working Group Paper, International
Transport Forum, Paris.

© OECD/ITF 201925

PUBLIC-PRIVATE PARTNERSHIPS IN TRANSPORT: UNBUNDLING PRICES FROM USER CHARGES | WORKING GROUP PAPER | ITF

Addressing uncertainty for suppliers: the construction phase as example
Adversarial vs. collaborative procurement – is collaborative Eriksson et al. (forthcoming),
contracting the future?
“Collaborative Infrastructure
Procurement in Sweden and theNetherlands”, Working Group Paper,
International Transport Forum, Paris.
What lessons in dealing with risk and uncertainty werelearnt in Danish mega projects from Storebaelt toFemernbaelt?

Vincentsen, L. and K. S. Andersson (2018),“Risk Allocation in Mega-Projects in
Denmark”, Working Group Paper,
International Transport Forum, Paris.

What can governments do in the short run to reduce
inefficient pricing of risk by construction contractors?

Kennedy et al. (2018), “Risk Pricing in
Infrastructure Delivery: Making
Procurement Less Costly”, Working Group
Paper, International Transport Forum,
Paris.

Addressing uncertainty in long-term contracts in the absence of continuous pressure for efficiency
What is the public sector organisational counterfactual on Holm, K.V. and T.H. Nielsen (2018), “The
which private investment should seek to improve?
Danish State Guarantee Model for
Infrastructure Investment”, Working
Group Paper, International Transport
Forum, Paris.
Partial fixes to the Private-Public Partnership approach
How would an organisational structure consisting of PPPs
come close to a network-wide management approach?
What benefits would it yield?

Vassallo, J. (2019), “Public-Private
Partnerships in Transport: Unbundling
Prices from User Charges”, Working Group
Paper, International Transport Forum,
Paris.

Should the public or the private side bear the cost of long- Engel et al., (forthcoming), “Dealing withterm uncertainty? How could we design a PPP contract to the Obsolescence of Transport
avoid hold-up due to incomplete contracts?
Infrastructure in Public-Private
Partnerships”, Working Group Paper,
International Transport Forum, Paris.
Long-term strategic approach
How do the PPP and regulated utility model (RAB)
compare in terms of efficiency incentives?

26

Makovšek, D. and D. Veryard (2016), “TheRegulatory Asset Base and Project Finance
Models”, International Transport Forum
Discussion Papers, No. 2016/01, Paris.

© OECD/ITF 2019

PUBLIC-PRIVATE PARTNERSHIPS IN TRANSPORT: UNBUNDLING PRICES FROM USER CHARGES | WORKING GROUP PAPER | ITF

What basic considerations underlie the choice between a
PPP and RAB approach?

Hasselgren, B. (forthcoming), “Riskallocation in Public-Private Partnerships
and the Regulatory Asset Base Model”,
Working Group Paper, International
Transport Forum, Paris.

Which are the preconditions a country would need to take Alchin, S. (forthcoming), “A Corporatised
to establish a RAB model on a motorway network? Is user- Delivery Model for the Australian Road
charging a must?
Network”, Working Group Paper,
International Transport Forum, Paris.
From the investors’ point of view, does a RAB need to be
fully reliant on user-charging?

Francis, R. and D. Elliot (2019),“Infrastructure Funding: Does it Matter
Where the Money Comes From?”,
Working Group Paper, International
Transport Forum, Paris.

Incentive regulation can also yield perverse incentives. Can Smith, A. et al. (2019), “Capex Bias andthe capex bias be managed?
Adverse Incentives in Incentive
Regulation: Issues and Solutions”, Working
Group Paper, International Transport
Forum, Paris.
Does it make sense to pursue hybrid solutions between
PPP and RAB?

Zhivov, N. (2018), “The Thames Tideway
Tunnel: A Hybrid Approach to
Infrastructure Delivery”, Working Group
Paper, International Transport Forum,
Paris.

Uncertainty and private investment mobilisation in transport infrastructure
What lessons can we draw from recent attempts tomobilise private investment in infrastructure in theaftermath of the global financial crisis?

Makovšek, D. (2018), “Mobilising Private
Investment in Infrastructure: Investment
De-Risking and Uncertainty”, Working
Group Paper, International Transport
Forum, Paris.

Synthesis

ITF (2018), Private Investment in Transport
Infrastructure: Dealing with Uncertainty inContracts, Research Report, International
Transport Forum, Paris© OECD/ITF 2019

27

CPB

CPB

CPB

Private Investment inTransport Infrastructure
Dealing with Uncertainty
in Contracts

The Role of Private
Investment in Transport
Infrastructure

Risk Pricing in
Infrastructure Delivery:
Making Procurement Less
CostlyPublic-Private Partnerships inTransport: Unbundling Prices
from User Charges

Corporate Partnership
Board

4

2

This paper presents a model
intended to address certain
downsides of Public-Private
Partnerships (PPPs). It focuses on
cases where demand risk should
not be transferred to the private
party. It argues that user charging
should remain the responsibilityof the public authorities andproposes to organise the fundingof PPPs via an infrastructure fund.
The paper is part of a series of
19 papers and a synthesis report
produced by the International
Transport Forum’s Working Groupon Private Investment in Transport
Infrastructure.

CPB

CPB

Dealing with the
Obsolescence of Transport
Infrastructure in PublicPrivate Partnerships

Risk Allocation in
Mega-Projects in Denmark

Risk allocation in PublicPrivate Partnerships andthe Regulatory Asset Base
Model

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8

Corporate Partnership
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10

12

CPB

CPB

CPB

The Thames Tideway
Tunnel: A Hybrid Approach
to Infrastructure Delivery

The Danish State Guarantee
Model for Infrastructure
Investment

Infrastructure Funding:
Does it Matter Where theMoney Comes From?

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16

14

18

CPB

CPB

CPB

Public-Private Partnerships
in Transport: Unbundling
Prices from User Charges

A Corporatised Delivery
Model for the AustralianRoad Network

Collaborative Infrastructure
Procurement in Sweden and
the Netherlands

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24

CPB

CPB

CPB

Competition for
Infrastructure Projects:
Traditional Procurement
and PPPs in Europe

Capex Bias and Adverse
Incentives in Incentive
Regulation: Issues andSolutions

Uncertainty in Long-term
Service Contracts:
Franchising Rail Transport
Operations

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Corporate Partnership
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Corporate Partnership
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28

26

30

CPB

CPB

CPB

Quantifying Private andForeign Investment inTransport Infrastructure

What is Private Investment
in Transport Infrastructureand Why is it Difficult?

Mobilising Private
Investment in Infrastructure:
Investment De-Risking
and Uncertainty

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Corporate Partnership
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1

6

CPB

20

International Transport Forum
2 rue André Pascal
F-75775 Paris Cedex 16+33 (0)1 73 31 25 00
contact@itf-oecd.org
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Publlished: 08/2019 | Photo credit: Aarón Borrás

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