CPB

Corporate Partnership
Board

Quantifying Private andForeign Investment inTransport Infrastructure2Quantifying Private andForeign Investment inTransport Infrastructure

Fernando Mistura

Organisation for Economic
Co-operation and Development, Paris

Working Group Paper
2019

The International Transport ForumThe International Transport Forum is an intergovernmental organisation with 59 member countries. It
acts as a think tank for transport policy and organises the Annual Summit of transport ministers. ITF is
the only global body that covers all transport modes. The ITF is politically autonomous andadministratively integrated with the OECD.
The ITF works for transport policies that improve peoples’ lives. Our mission is to foster a deeper
understanding of the role of transport in economic growth, environmental sustainability and social
inclusion and to raise the public profile of transport policy.
The ITF organises global dialogue for better transport. We act as a platform for discussion and prenegotiation of policy issues across all transport modes. We analyse trends, share knowledge andpromote exchange among transport decision-makers and civil society. The ITF’s Annual Summit is theworld’s largest gathering of transport ministers and the leading global platform for dialogue on transport
policy.
The Members of the Forum are: Albania, Armenia, Argentina, Australia, Austria, Azerbaijan, Belarus,
Belgium, Bosnia and Herzegovina, Bulgaria, Canada, Chile, China (People’s Republic of), Croatia, Czech
Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, India, Ireland,Israel, Italy, Japan, Kazakhstan, Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mexico,
Republic of Moldova, Montenegro, Morocco, the Netherlands, New Zealand, Norway, Poland, Portugal,
Republic of North Macedonia, Romania, Russian Federation, Serbia, Slovak Republic, Slovenia, Spain,
Sweden, Switzerland, Turkey, Ukraine, the United Arab Emirates, the United Kingdom and the UnitedStates.
International Transport Forum
2 rue André Pascal
F-75775 Paris Cedex 16
contact@itf-oecd.org
www.itf-oecd.org

ITF Working Group Papers
ITF Working Group Papers present findings on specific aspects within the area of inquiry of an ITF
working group. They accompany and complement the group’s high-level findings presented in its main
output, published as an ITF Research Report, with additional detail and analysis. ITF working groups bring
together international experts over a period of usually one to two years, and are vetted by the ITF’s
Transport Research Committee. Any findings, interpretations and conclusions expressed herein are thoseof the authors and do not necessarily reflect the views of the International Transport Forum or theOECD. Neither the OECD, ITF nor the authors guarantee the accuracy of any data or other information
contained in this publication and accept no responsibility whatsoever for any consequence of their use.
This document and any map included herein are without prejudice to the status of or sovereignty overany territory, to the delimitation of international frontiers and boundaries and to the name of any
territory, city or area.
Cite this work as: Mistura, F. (2019), “Quantifying Private and Foreign Investment in Transport
Infrastructure”, Working Group Paper, International Transport Forum, Paris.

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

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 3.

© OECD/ITF 2019

3

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Acknowledgements
This report was initially produced for the OECD Investment Committee under its work programme on
infrastructure investments. It was presented and discussed at the OECD Investment Committee meetingin December 2015. The report was also discussed at the OECD Meeting of Senior Public-Private
Partnerships and Infrastructure Officials, organised by the Directorate for Public Governance andTerritorial Development in February 2016, and at two meetings of the OECD/G20 Task Force on
Institutional Investors and Long-Term Financing in March and April 2016. It benefited from colleagues’comments of the International Transport Forum and various OECD bodies, namely the Economics
Department, Development Centre, Directorate for Public Governance and Territorial Development, andthe Investment and Financial Affairs Divisions of the Directorate for Enterprise and Financial Affairs. The
report was possible in large part thanks to the contribution of Michael Gestrin from the OECD
Investment Division, who kindly compiled and shared the data on transport infrastructure projects.
The current version of the report embodies revisions and feedback received, and integrates updated
information regarding transport infrastructure projects in the period 2015-2016. It does not, however,address recent developments extensively. Data supporting the section on privatisation have not been
updated due to accessibility limitations.

4© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Table of contents

Executive summary ............................................................................................................................. 6
Introduction ........................................................................................................................................ 8
Overview of data sources and limitations .......................................................................................... 10
National accounts.......................................................................................................................... 10
Firm-level data .............................................................................................................................. 11
Project-level data .......................................................................................................................... 12
Dealogic’s Projectware database: Project-level data .................................................................... 12
Thomson Reuters One database: Mergers and acquisitions ......................................................... 13
Stylised trends from project-based data ............................................................................................ 14
A rise in private investment in transport infrastructure ................................................................ 14
Private investments in transport infrastructure rebounded from crisis-related slowdown .......... 15
Attracting private investment into road infrastructure in non-OECD economies ......................... 16
Rise in private participation in transport infrastructure mirrors global trend ............................... 18
Foreign investment plays larger role in OECD and non-OECD countries alike .............................. 19
Financing for long-term infrastructure projects rebounds post-crisis........................................... 21
Bond financing recovers strongly after the crisis .......................................................................... 22
The increased role of export credit agencies in infrastructure financing ...................................... 23
Project refinancing levels soar ...................................................................................................... 24
Conclusion ......................................................................................................................................... 25
Notes................................................................................................................................................. 26
References ........................................................................................................................................ 28
Appendix 1: PSPI and characteristics ................................................................................................. 33
Appendix 2. Summary of Project-Based Data Used in the Report ...................................................... 34
Appendix 3. Research questions and outputs of the Working Group on Private Investment
in Infrastructure ................................................................................................................................ 38© OECD/ITF 2019

5

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Executive summary
What we did
Transport infrastructure is an essential ingredient to economic development and inclusive growth. It isthe critical backbone for the emergence and expansion of global value chains. Both OECD and non-OECD
countries face significant pressure to keep up with infrastructure investments, either to upgrade or
replace existing ageing infrastructures or to continue expanding infrastructure. In this context, anddespite the challenges to ensure they deliver upon value for money expectations, governments haveincreasingly turned to the private sector for infrastructure delivery. Yet, the surprisingly limited
availability of data on private investments in transport infrastructure at more disaggregated levels
constitutes an important limitation to effective policy making.
This report represents a first attempt to quantify private and foreign investment in transport
infrastructure by sub-sectors – airports, ports, railroads and roads – in a large range of countries,
covering investments in 108 economies from 1995 to 2016. To date, evidence-based analysis andinformed policy-making has been hindered by important data limitations of public statistics systems.
Knowing how much investment in transport infrastructure exists and how it has evolved overtime iscritical for policy-makers. It allows them to assess existing policies and to influence the levels and typesof transport infrastructure investments. This report represents a starting point, and by no means
provides an exhaustive picture. It draws on existing commercial databases to broaden the evidence ofprivate participation in transport infrastructure at more disaggregated levels. It is original in that it also
provides one of the first estimates of foreign participation in transport infrastructure.

What we foundPrivate investment in transport infrastructure reached almost USD 1.35 trillion within 1995-2016 (inconstant 2014 Purchasing Power Parity terms). Around half was spent in OECD countries. Globally, 62%of investments take place in just ten countries. Seven of them – the United Kingdom, Australia, UnitedStates, Spain, Turkey, Korea and France – are OECD member countries and are responsible for 32% of
the total and 64% of the investments in OECD countries. India, China and Brazil account for theremaining 30% of the total and 61% of investments in non-OECD countries. The road sector accounted
for half of the investments in the period, followed by railroads (26%), airports (14%) and ports (11%).
The number of countries recurring to private investments increased tremendously overtime. In the last
five years, 32 countries turned to private investors for investments in infrastructure, compared to only
23 in the early 2000s. While a large number of countries – 39 out of 108 – turned to private investors for
only three years or less, about 30 countries engaged with them for more than seven years.
Despite a crisis-related decline, private investments in transport infrastructure remain at higher levels
than observed in the period just before its pre-crisis peak in 2006. From 2006-2010, investments morethan doubled compared to the 2000-2005 period, despite the crisis that hit global markets during those6© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

years. The crisis affected mostly investments in OECD countries, which halved from its pre-crisis peak in
2006. Nonetheless, investment levels remain higher than observed in the early 2000s. A recovery trend
has been observed since 2012, though investments have yet to reach their pre-crisis peak. In non-OECD
countries, the crisis only shortly strained investments’ rapidly ascending trajectory. Investments began to
decline in 2012 with the economic slowdown in the large emerging economies, but this has been
reversed in the last couple of years, with investments reaching a new high in 2016. Privatisations, which
played a major role in the early periods of private participation, are up again in both groups of countries
as fiscally-constrained economies seek to sell up assets.
Attracting private investment to road infrastructure seems to have been particularly challenging for nonOECD countries. On average, the cumulative amount of private investments in transport infrastructureamounted to 2.3% in OECD countries and 1.8% in non-OECD countries between 1995 and 2016 as ashare of the 2014 GDP. But important differences in the sectoral distribution of such investments areobserved. Investments in roads and railroads have been more prevalent in OECD countries on average.
Investments in the road sector were three times more important as a share of GDP than in non-OECD
countries. This is partly explained by the poorer performance of smaller emerging and developing
countries in attracting capital into these sectors.
From 1995 to 2016, foreign investors were involved in projects totalling roughly 58% of private
investments in transport infrastructure in OECD countries and roughly 33% in non-OECD countries.
Domestic investors have played an increasing role in non-OECD countries since the mid-2000s. From2006 to 2010, projects with only domestic sponsors invested ten times more than between 2000 and
2005, increasing 2.9 times faster than the amount invested by projects involving foreign sponsors. This
trend has accentuated from 2011 to 2016. This suggests a more competitive environment for foreign
investors in the rapidly expanding emerging markets where domestic players’ capacity is also growing.
The financing landscape for infrastructure projects has mostly recovered from the crisis. The liquidity
dry-up observed during and in the aftermath of the global financial crisis has been mostly reversed in the
traditional bank market and in capital markets. Bond financing, which had practically disappeared after
the crisis with the demise of the monoline insurance market, has grown in both OECD and non-OECD
countries in recent years, albeit representing still only a minor fraction of transport infrastructure
financing – about 10% of the financing of projects within 2011-2014, against 4% in 2006-2010. It plays an
increasing role in the refinancing of projects, which have reached their highest levels in recent years. The
availability of other non-bank sources of capital has also grown.

What we recommend
Improve the collection and dissemination of disaggregated data on the level and characteristics of private
investments in transport infrastructureThis paper showed that evidence-based policy making is partly inhibited by the lack of adequate andaccessible data on both public and private investments in transport infrastructure at more disaggregatedlevels. Commercially available datasets may provide an alternative in the short-term, but importantcaveats remain to justify further efforts to improve the collection and dissemination of comprehensive
data on the level and characteristics of private investments in transport infrastructure. This is a necessary
endeavour for supporting more effective policy making, ultimately enabling the assessment of different
policies and incentive frameworks for private participation in infrastructure and for contributing tomaking infrastructure an asset class.

© OECD/ITF 2019

7

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Introduction
Transport infrastructure is an essential ingredient for economic development and inclusive growth. It
raises economic opportunities and well-being by connecting firms and people to markets and byextending people’s access to critical services. It facilitates agglomeration and helps to reduce the cost oftransportation services, enabling further competition and productivity gains and broader welfare
benefits. It is likewise crucial for the participation in global value chains and the degree of economic
diversification. Conversely, inadequate transport networks may exacerbate their potential negative
externalities, such as congestion and pollution. It may also entail some relocation of economic activity,
which implies adjustment costs for affected regions.
Investment decisions regarding transport infrastructure have, therefore, critical long-term implications
for development.1 The OECD has estimated that over 4% of global GDP is required in infrastructure
investments to sustain growth and social development up to 2030 (OECD, 2007; OECD, 2012). In OECD
countries, investments are increasingly needed to upgrade or replace existing ageing infrastructures.
Economic development and growing urbanisation are similarly driving demand for infrastructure
expansion in developing economies. But current levels of investment fall far short of needs, leaving a
global gap of about 1.25% of world GDP (WEF, 2013).2
Private investment3 can be an important ally to meet transport infrastructure needs in appropriate
settings. The merits of private participation, however, may not lie on relieving strained government
budgets as often advocated with public-private partnerships (PPP), but on the potential efficiency gains
that may arise from their involvement (Engel, Fischer and Galetovic , 2009). PPPs are said to provide
incentives to firms to minimise overall costs throughout the project’s lifetime by bundling the
responsibility for the initial capital investment with future maintenance and operating costs. They may
also help to insulate projects from stop-go funding characteristic of traditional delivery and protect
maintenance expenditures by conditioning payments on service quality and availability (Perkins, 2013).
However, the potential for private sector efficiency gains can easily be dissipated if competition and theregulatory framework for private participation are deficient. Inadequate project planning and risk sharing
allocations in many transport PPP projects can result, and sometimes have, in renegotiations that prove
expensive for taxpayers (Perkins, 2013; Bitran, Nieto-Parra and Robledo, 2013; OECD/CAF/ UN ECLAC,
2013).4 The role and some of the challenges of private investment through PPPs are covered in greater
detail in Makovšek (forthcoming).
Nonetheless, mobilising greater levels of private investment into transport infrastructure has become akey priority for governments around the world. The surprisingly limited availability of consistent data on
both public and private investment in transport infrastructure, however, constitutes an important
limitation to effective policy-making in this regard (Wagenvoort, De Nicola and Kappeler, 2010). Knowing
how much public and private investment in transport infrastructure exist and how have they evolved
overtime is critical for policy-makers to assess existing policies and to influence the levels and types oftransport infrastructure investments. Available national statistics often lack the required level of sector
disaggregation for more detailed analysis and policy insights. Project-level statistics is a likely alternative
but, at present, such data are more readily available for developing countries than for OECD countries,
and almost no data on the non-financial performance of such projects are available. As such, theempirical literature has often explored the effects of policies and other determinants on investment inaggregated infrastructure sectors if not all combined, with a few exceptions (Hammani, Ruhashyankiko

8© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

and Yehoue, 2006; Moszoro et al., 2014; Basilio, 2011; Sharma, 2012) and often without distinguishingamong types of investors and contractual modalities for private participation.
This report, therefore, aims to quantify private and foreign investment in transport infrastructure by subsectors in a large range of countries, including developed ones. Data cover investments in 108
economies from 1995 to 2016 and refer to investments in airports, ports, railroads and urban rail
infrastructure, and roads, including bridges and tunnels. It represents a first attempt to profile such
trends and by no means provides an exhaustive picture. A number of data-related caveats exist. Still, ityields interesting observations on how domestic and foreign investments have been channelled intotransport infrastructure in OECD and non-OECD countries. Its main contribution comes from drawing on
project-level data to broaden the evidence and understanding of private participation in transport
infrastructure at more disaggregated levels. It also provides a first attempt to profile foreign participationin transport infrastructure. To our knowledge, there has been no such attempt in previous studies.
However, results should be interpreted with caution. The report does not overcome a number of datarelated gaps and challenges. It builds on a commercially available project-level database, which is not
subject to any official vetting and may be subject to coverage shortcomings and inconsistencies. Data
reported also do not represent the full spectrum of private investment possibilities. It covers mostly
project finance deals, although a reasonable amount of large non-project finance deals are included.5
The varying importance of project finance across transport infrastructure sub-sectors is potentially acaveat – as corporate finance may play a large role in some cases. Data include PPPs, which may involve
public support and investment, although upfront capital expenditures in PPPs are typically privately
financed by equity and financial sponsors.
The limited information available, however, made it impossible to consistently distinguish cases where
significant public involvement through state-owned companies or publicly-owned banking finance may
have occurred. In this respect, one should interpret such data as an upper boundary for the level ofprivate participation. Full or partial privatisations by state-owned companies are also included. Lease andmanagement contracts are not covered, but these are unlikely to represent a significant form of private
capital investment in most transport infrastructures.6 Finally, for ease of reading, this report applies theterm “investment” to describe the project-based data used, but the data do not reflect annual
investment flows in the normal way one would think about gross fixed capital formation. It refers insteadto projects’ total capital value at financial closure.
Further work to collect data on the level and characteristics of private and public investments intransport infrastructure at a disaggregated level is, therefore, required and would make it possible toinvestigate pertinent questions for supporting policy-making, ultimately enabling the assessment ofdifferent policies and incentive frameworks for private participation. The OECD is uniquely placed tolaunch a systematic data collection exercise on the stock, trends and characteristics of investments
infrastructure at a disaggregated level. This is now partly the objective of the Joint Infrastructure Data
Initiative developed by the OECD, the European Investment Bank, the Global Infrastructure Hub, and theLong Term Investor Club and Long Term Infrastructure Investors Association, which was formallylaunched at the end of 2017 with the support from the G20-OECD Task Force on Institutional Investors
and Long-term Financing. The initiative aims to address the issue of establishing infrastructure as an
asset class through data collection and improving the availability of infrastructure investment data.

© OECD/ITF 2019

9

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Overview of data sources and limitations
Comprehensive data on investment in infrastructure is lacking as a whole (Wagenvoort, De Nicola andKappeler, 2010), let alone in specific transport infrastructure sub-sectors.7 Available datasets present
numerous shortcomings, ranging from limited country coverage and disaggregation levels to a narrowcoverage of type and source of investment. The main data sources and limitations are explained below.

National accounts
The measure of gross fixed capital formation (GFCF) is the most often used proxy measure forinvestments in infrastructure. GFCF data are normally available in a comparative form for a large range ofcountries from international organisations’ databases, such as the IMF, OECD and the United Nations.
However, they are hardly reported at a more disaggregated level necessary for the identification of
investments in each transport infrastructure sub-sector (airports, ports, railroads and roads), let alone by
its institutional sources (i.e. public or private). Most often, data per economic sector is only reported forbroad categories (e.g. transport, storage and communications) or at the overall transport sector level
when reported under most recent standards, such as the International Standard Industrial Classification(ISIC Rev. 4) or equivalent.8
The standard allows for further breakdowns, but only a few countries actually report data with greater
granularity. Another relevant issue is that one cannot distinguish between investments in the operationof transport infrastructure assets and transport services (e.g. passenger and freight transport), since bothare typically bundled within the “transport and storage” category. Likewise, data availability by thedifferent institutional sources is limited to only a narrow range of countries. Even in these cases caution
is required because the rules for reporting under the general government or corporate account are notstraightforward (Gonzalez Alegre et al., 2008).9
Nonetheless, the information currently available provides for some order of magnitude of investments
channelled into transport infrastructures. Figure 1 reports total investment in the transport and storage
sector, as well as investments by the general government on transport for the OECD countries for whichdata were available. In 2015, the median investment in transport and storage was equivalent to 1.64% ofGDP, while the median investment by the general government in its transport function was about 1% ofGDP. Capital expenditures by the government are reported by government functions and typically
include investment related to the construction, maintenance and operation of public infrastructure. The
total economy figure, however, includes all GFCF related to the transport and storage sector, including
investments in transportation services activities beyond infrastructure structures. As such, theseestimates cannot be directly matched, but together they provide some idea of the relative importance ofprivate and public investment in transport infrastructure.

10© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Figure 1. Total and government investment in transport infrastructure inOECD countries from 2000 to 2016
Total economy: Transport and Storage

4.0

MedianLower bound (5%)
Gross Fixed Capital Formation, % of GDP

General Government: Transport Function

Upper bound (95%)
2.5MedianLower bound (5%)
Gross Fixed Capital Formation, % of GDP

Upper bound (95%)

3.5
3.0
2.5

2.0
1.5

2.0

1.5
1.0

1.0
0.5

0.5
0.0

0.0

Note: Data for total investments in transportation and storage were available for 18 to 32 OECD countries
depending on the year. Data on investments by the general government in the transport function were available
for 14 to 24 countries depending on the year. The transport and storage sector includes investments associatedwith the provision of passenger or freight transport, whether scheduled or not, by rail, pipeline, road, water or air
and associated activities such as terminal and parking facilities, cargo handling, storage etc. This section also
includes activities supporting the transport of passengers or freight, such as operation of parts of the transport
infrastructure or activities related to handling freight immediately before or after transport or between transport
segments. The operation and maintenance of all transport structures and facilities is included. Postal and courier
activities are also included. Investments by the general government in its transport function refers to capitaloutlays associated with the administration of affairs and services concerning operation, use, construction andmaintenance of transport systems and facilities; the construction or operation of non-enterprise type of transportsystems and facilities, as well as disbursement of grants, loans or subsidies to support the operation, construction,
maintenance or upgrading of transport infrastructure systems and facilities.
Source: OECD (n.d.).

Firm-level data
Data on capital expenditures by firms operating in infrastructure sectors are potentially another rich data
source for assessing investments in infrastructure assets. There are a few commercial databases thatprovide such information, allowing one to compile to some extent capital expenditure data by private orstate-owned firms at the sub-sector level. However, important drawbacks exist. While capital
expenditure (capex) data of publicly listed companies is relatively accessible, information on privatecompanies is generally more difficult to obtain. Additionally, reporting is sometimes limited to theholding company or group unit, which limits the ability to distinguish investments between different
business lines and geographical coverage. In transport infrastructure, for instance, it is not uncommon
for a company to operate in different transport mode segments, and possibly in multiple countries,
which can limit the usefulness of such data for policy analysis.

© OECD/ITF 2019

11

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Project-level data
Project data is likely the closest information to investment in infrastructure that is available at a moredetailed level, particularly for private sector participation. Project data is available from a few
commercial databases for a large number of projects across the world, with a relatively high degree of
detail. It allows identifying projects in specific sub-sectors, as well as their financing structures, contract
types and foreign involvement to some extent. The World Bank’s Private Sector Participation in
Infrastructure database is likely the only publicly available database of this kind. It provides similar
information to the commercial databases, but is limited to projects in low- and middle-income countries
and regions only.
Project data, however, also has its caveats. It fails to distinguish between private and public capital,
although in principle upfront public investments in these projects – to the extent that they are notnormally delivered through traditional public procurement methods – are expected to be limited.
Nonetheless, public involvement through state-owned enterprises (SOE), public bank financing or otherforms of financial support – even to projects owned by private investors – cannot be fully excluded.
Moreover, data seems to capture mostly project financed proposals and it is not clear the extent towhich it covers transport infrastructure projects financed by other means.
The use of project finance for large-scale infrastructure projects dates back to the 1930s in the US, andback to the 1980s in Europe, and has been used worldwide to support infrastructure financing (Della
Croce and Gatti, 2014). It is likely the most common funding structure for large capital-intensive
greenfield transport infrastructure projects with relatively transparent cash flows (Izaguirre and Prakash
Kulkarni, 2011; Estache, Ellis and Trujillo, 2007). But while the development of project finance has been
an important driver behind the increasing number of public-private partnerships in both developed anddeveloping countries, it may cover only a small share of total infrastructure investments in some cases(Wagenvoort, De Nicola and Kappeler, 2010). Traditional corporate financing, for instance, may play animportant role in some infrastructure sectors, such as telecommunications, and possibly for financing
additional investments in existing projects once operational. There is limited information on the extent
to which corporate financing is used in financing capital expenditures in transport sub-sectors.
Another important caveat of such databases is that reported information represents the stock ofinvestments in each project, i.e. the total project capital value, and do not reflect the annual investment
flows. Also, the commercial databases do not cover management and lease contracts, as well as
traditional public procurement. Finally, data is reported on a voluntary basis by the financial institutions
involved in the project transaction. They may therefore lack consistency in the coverage of projects orregions, even though financial institutions have everything to gain by reporting such information, as
these are used in widely known deal-making rankings of legal advisors and financial institutions. In fact, acomparison of three available databases within the context of this work revealed rather significant
differences in deal coverage.
With such caveats duly noted, the proposed work draws on two commercial databases to profile trends
in private investment in transport infrastructure in OECD and non-OECD countries: Dealogic’s
Projectware database and Thomson Reuters One database, described in detail below.

Dealogic’s Projectware database: Project-level data
Dealogic Projectware is one of the most renowned infrastructure project databases available. Several
commercial and international organisations, including the World Bank and the European PPP Expertise
12© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Centre with the European Investment Bank, draw on this database for information on private investment
in infrastructure. The database contains information on project and trade finance transactions in bothdeveloping and developed countries. Information is collected directly from the banks and organisations
involved in the deals, and include financial and non-financial information from pre-approval to thefinancial closure of such projects. The database provides data on the total project amount and theirbreakdown by financing sources, including loans, equity and bonds. It includes greenfield and brownfieldtransport infrastructure projects, as well as full or partial divesture by state-owned companies. Lease andmanagement contracts are not covered.
The Dealogic Projectware database was used because it offered a larger deal and country coverage thanthe other two databases assessed for this project, notably the World Bank’s Private Sector Participationin Infrastructure and Thomson Reuters One database. Data from 1995 to 2016 covers 1 765 deals in 111
countries in the following transport sub-sectors: airports, ports, roads (which includes bridges andtunnels) and rail (including railroads, urban mass rail transit and light rail transit systems). The dataset
covers both project finance deals and some large non-project finance infrastructure deals. Ordinary
corporate financing transactions of infrastructure-related companies are not covered. Appendix 1
presents the spectrum of private participation in infrastructure and its main characteristics. Project datareported here covers essentially those projects implemented through Build-Operate-Transfer (BOT)
contracts or other similar contractual structures and concession contracts to some extent, which arenormally those with the largest capital commitments. Private participation through the privatisation ofidentifiable infrastructure assets is also covered.

Thomson Reuters One database: Mergers and acquisitions
The Thomson Reuters One database establishes general trends on the privatisation of state-owned
companies operating in the transport infrastructure sector. It provides complete coverage of global
mergers and acquisitions. The database tracks changes in economic ownership at the ultimate parent
level and all deals involving a purchase of at least a 5% stake (or a 3% stake for disclosed value deals of atleast USD 1 million). As with project data, submissions by banking and legal contributors involved inmergers and acquisitions are the source of the database. The database also undergoes extensive
research by a global team of dedicated research analysts across a broad range of sources including
regulatory filings and corporate statements and reports. It compiles a rich set of transaction information,
including pertinent information for tracking private investment in infrastructure sectors, such as thetransaction’s total value, the nationality of investors and ultimate owners, disaggregated sector
classification. It also identifies the types of investors or targets (e.g. state-owned, private or public
corporations, sovereign wealth funds, etc.).
For this report, the data provides useful information on global privatisations in transport sub-sectors, as
one can identify both total and partial divestures by government-controlled companies in specific subsectors. It differs somewhat from the project data in that it captures ownership at the corporate level,
whereas Dealogic Projectware mostly captures state divestures of infrastructure assets. The informationis treated separately, using Thomson Reuters data only for the purpose of establishing general
privatisation trends. Reported data comprises 3 300 merger and acquisition deals from 1995 to 2014
which resulted in ownership by the acquiring company of at least 10% of the shares of the acquiredcompany after the transaction, excluding deals in which the acquirer is a government body or entity inwhich it owns 50% or more of its capital. The database applies a 10% ownership threshold after thetransaction. This is the standard classification of a lasting interest by direct investors in a company as per
the OECD Benchmark Definition of Foreign Investment and the IMF Balance of Payments Compilation© OECD/ITF 2019

13

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Guide. Such ownership level is assumed to give investors an effective voice in the management of thecompany. Although this level of ownership may not provide investors with any management influence
power in the case of privatisations where the state retains a majority control, or a veto interest in theprivatised company through a “golden share”, it was not possible to identify only those deals where thestate has divested fully or held only a minority participation after the transaction.
Only deals in which the target company’s primary Sector Industry Classification (SIC) code corresponds toinfrastructure transport sub-sectors were included. The SIC code refers to four-digit numerical code
assigned by the United States government to business establishments to identify their primary businessactivity (4581: airports and airport terminal services; 4493 and 4491: marinas and marina cargo handling;
4011, 4013 and 4111, railroad switching and terminal establishments and local and suburban transit;
4785 and 4173: inspection and fixed facilities for motor vehicles and bus terminal and service facilities).
Thomson Reuters extends this coding to all companies in the database.

Stylised trends from project-based data
This section draws on both project-based and mergers and acquisitions data from commercial databases
to provide evidence of private and foreign participation in transport infrastructure at disaggregatedlevels. As mentioned above, this report represents a starting point, and by no means provides an
exhaustive picture. Caution is required when interpreting the data. For ease of reading, data reported
here are termed as “investments in infrastructure”, although they actually reflect total project financial
commitments and, hence, do not reflect proper investment flows in the normal way one thinks aboutgross fixed capital formation. In the same manner, cumulative commitments over the period do not
represent the stock of investment. Nevertheless, despite the caveats, some suggestive patterns andobservations emerge on the basis of this information.

A rise in private investment in transport infrastructure
Private investment in transport infrastructure reached almost USD 1.35 trillion (in constant 2014 PPP
terms) between 1995 and 2016, of which OECD countries accounted for USD 673 billion or 50% of thetotal (Figure 2). Globally, 62% of investments happen in ten countries: the United Kingdom, Australia, theUnited States, Spain, Turkey, Korea and France are responsible for 64% of total investments in OECD
countries, while China, India and Brazil account for 61% of total investments in non-OECD countries.
In the early 2000s, private investment in transport infrastructure was mostly concentrated in OECD
countries (Figure 2). Yearly investment in these countries increased almost five times between 2000 andits pre-crisis peak in 2006. Non-OECD countries, on the other hand, only began to significantly attract
private investments in transport infrastructure in the mid-2000s. Governments’ increased interest in
private sector participation in transport infrastructure has been a major driving force behind such trends
in both OECD and non-OECD countries.10 The possibility of raising debt off-budget for infrastructure
projects when delivered through public-private partnerships may likely have added an important push tothis trend, despite the inherent risks of this approach to financial discipline and transparency (Hammami,

14© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Ruhashyankiko and Yehoue, 2006). But this may not be entirely sufficient to explain the trend, as someof the biggest users have been relatively transparent about them.

Private investments in transport infrastructure rebounded fromcrisis-related slowdown
The global financial crisis put a strain on private infrastructure investments in both groups of countries,
but more pronouncedly so in OECD economies. Traditional long-term bank-financing for infrastructure
projects dropped off considerably in the immediate aftermath of the crisis as notable participants in the
global project finance market, such as the European banks, struggled to recover (World Bank, 2013;
Burger et al., 2009).11 Domestic banks active in other important PPP markets, such as Canada andAustralia, were also affected to some extent, but considerably less so (PWC, 2013; KPMG, 2015). Stricter
banking regulations following the crisis may also have contributed to limited bank financing for suchprojects, although general market uncertainty and adjustment of expectations may have had a moredeterminant impact, as these measures were not implemented overnight.12 The cost of bank financing
increased with bank deleveraging: average credit spreads increased from 50-150 base points (BPS)
before the crisis in Europe to 225-300 BPS (Blackrock, 2014).13 But harsher financing conditions have notacted alone in constraining investments in infrastructure projects. Infrastructure-related companies, too,seem to have hoarded cash after the crisis and refrained from undertaking long-term investments; andthis, despite the current low-interest rate environment (Blundell-Wignall and Roulet, 2013).
Figure 2. Evolution in private investment in transport infrastructure
by country type and sub-sector from 1995 to 2015
Total
180000OECD

constant 2014 international dollars, million

Airports
Roads

Non-OECD
180000Ports# of deals

constant 2014 international dollars, million

Railroads# of deals

160

160000160000140000140000120000120000100000100000

80000

80000

60000

60000

40000

40000

20000

20000

20

0

0

-

140
120
100
80
60
40

Note: Project data is available for 31 OECD countries and 80 non-OECD countries, although total project amounts
are available for only 77 of the non-OECD countries. Only projects reaching financial closure are included, and thedate refers to the financial close date. Refinancing deals were excluded. Data do not cover infrastructure service
contracts (e.g. management and lease contracts). Transactions are reported in US dollars (million) in the database(transactions not denominated in US dollars are converted by Dealogic to US dollars at the loan agreement signingdate), and were converted to constant 2014 international dollars using purchasing power parities and the growthof GDP in constant local currency units from the World Bank Development Indicators database, complemented by
the IMF’s World Economic Outlook database when not available. Transport infrastructure sectors refers to
Dealogic’s classification: airport; bridge, road and tunnel (roads); rail infrastructure and urban railway/LRT/MRT(railroads); and port. Projects are assumed to be private, although they may involve some public investment.
Data on the share of public investment (if any) in these projects are not available.
Source: Dealogic (n.d.).

© OECD/ITF 2019

15

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

In OECD countries, the effect of the crisis was immediate and substantial. By 2009, private investment ininfrastructure had dropped to half of the investment level seen during the pre-crisis peak in 2006.
Nonetheless, investment levels in the period following the crisis remained higher than in the late 1990s
and early 2000s. In non-OECD countries, the immediate effect of the crisis was much less pronounced. It
was not until 2012 that private investment in transport infrastructure declined substantially as economic
conditions deteriorated in large emerging economies too.
The average deal size tends to follow a similar pattern across OECD and non-OECD countries overtime. In
both groups deal sizes tended to increase until the crisis. Since then, relatively smaller projects havesucceeded in securing financing as the average deal sizes shrank during the 2011-2016 period. The crisis
effect aside, the previous growth in average deal sizes partly demonstrates increased confidence andappetite for large PPP transport projects by both governments and private sector participants. Acrosssub-sectors and throughout the entire period, the largest average deal size is observed in airports and in
the railroad sector. This pattern holds in both OECD and non-OECD countries, albeit inversely ordered. It
resonates to some extent both the capital-intense nature of railroad projects and the architecturalsignature nature of airport projects, which can sometimes go beyond its mere transport functionality.
The roads sector shows the lowest variation in the average deal size over the entire period, remaining
relatively stable in OECD and non-OECD countries. Average deal sizes in roads and ports sectors werealso fairly equal across both groups of countries, whereas they differed substantially for railroads, andairports to a lesser extent.
In all, OECD and non-OECD countries present little difference in terms of the sub-sectoral distribution ofprivate investments flowing into transport infrastructure. Roads and railroads have attracted the largest
amount of investment during the period 1995-2016, accounting for 48-50% and 25-30% of total
investments respectively. The rest was almost evenly distributed between airports and ports in nonOECD countries, and mostly dominated by airports in the case of OECD countries. This comes as no
surprise as the potential number of road projects in a country and the average size of rail projects tend
to be greater than in other sectors.14 The large amount of private investments in railroads in non-OECD
countries was, however, mostly driven by projects in a few large emerging economies, such as China,
India and Malaysia.

Attracting private investment into road infrastructure in non-OECD
economies
When looking at private investments as a share of GDP, differences emerge across the OECD and nonOECD country groups (Figure 3). To begin with, total private investment in transport infrastructure has
been relatively more important in OECD countries, although the difference is not statisticallysignificant.15 On average, the stock of private investment between 1995 and 2016 as a share of 2014
GDP at PPP prices amounted to 2.3% in OECD and 1.8% in non-OECD countries. Higher per capita income
levels and relatively higher institutional maturity in OECD countries may allow for more predictableconditions for private investors to assume the risks these projects entail. Evidence suggests that private
investment in infrastructure is highly related to a country’s sovereign risk rating, much more than overall
foreign direct investment, for instance (Araya, Schwartz and Andres, 2013).

16© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Figure 3. Private investment as a share of GDP in OECDand non-OECD from 1995 to 2016
OECD countries
2.5%

Non-OECD countries% of 2014 GDP at PPP prices, country average

2.0%

1.5%

1.0%

0.5%

0.0%

Airports

Ports

Railroads

Roads

Total

Note: It is assumed that the 31 OECD and 77 non-OECD countries for which project amount data is available in
the Dealogic’s database are those who allow and are willing to attract private investments in infrastructure. This is
assumed to be the case across transport sub-sectors, i.e. if a government decided to contract a project to private
investors in at least one sector in the observed period, it is assumed that such a government would in principle bewilling to do the same across all transport sub-sectors. The absence of a deal in one sub-sector is therefore
interpreted as absence of investments in that sub-sector; not a legal impossibility neither lack of data. Levels ofinvestments are interpreted as both a reflection of the potential room for private investment and conditions forsuch investment to take place. In this sense, relatively lower levels of private investment are seen as both aconsequence of limited potential for private investment, for instance due to affordability or value for money issues,
and/or a consequence of deficient conditions for such investments to occur. The opposite is assumed for relatively
higher levels of investment. See also the notes to Figure 2 for further data-related information.
Source: Dealogic (n.d.) and World Bank (n.d.).

Most notably, the sectoral distribution of private investment in transport infrastructure has been distinct
across OECD and non-OECD countries in relative terms. This is partly due to the different underlying
economic conditions between investments in each transport sub-sector and across the two groups ofcountries (Figure 3). Investments in the road and railroad sectors have been more prevalent in OECD
countries, with investments in the road sector being three times more important relative to GDP than in
non-OECD countries on average. Conversely, in non-OECD countries it has been relatively more
important in airports and ports than in the other sub-sectors. Only a few large emerging economies andsome more developed non-OECD countries have actually managed to attract capital into railroads. Thismay be evidence of a more limited scope for railroad projects in a number of countries, where railtransport may have been historically less prominent and economic conditions relatively more prohibitive.
Railways are difficult to implement anywhere, often requiring heavy institutional support, which may be
more difficult to secure in less developed economies.
A growing demand for air travel, which has historically outpaced economic growth, has sparked private
investors’ interest in airport assets (Andrew and Dochia, 2006). The observed differences also suggestthat the airport and port sectors may have been more easily reformed with a view of introducing
appropriate regulatory governance and price structures, providing greater certainty to investors. In the
airport sector, for instance, a number of countries have introduced independent regulators and© OECD/ITF 201917

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

privatised or corporatised incumbent state-owned providers. Liberalisation of air traffic has also boosted
demand for air transport (Gillen, 2007). In addition, user funded projects and services likely face lesspolitical pressure to maintain those provided and funded by the state. As Estache, Ellis and Trujillo (2007)
argue, transport infrastructure where the end-user is a corporate or commercial client – such as airports,
ports and cargo railways – tends to be less risky given the customers’ relatively higher payment capacity.
However, regulatory reforms for roads seem to have been less compelling, even in some OECD
countries, at least in terms of regulatory governance. Several countries lack independent regulatory
governance structures in the sector (Sutherland et al., 2011), a sector which is more likely to be subject
to social and political pressures to keep tariffs low (Estache, Ellis and Trujillo, 2007). This may explain, inpart, the higher incidence of cancelled or distressed projects in the road sector in developing economies
than in other sub-sectors, as indicated by the World Bank Private Sector Participation database.

Rise in private participation in transport infrastructure mirrors
global trend
Privatisation16 reflects a partial or full divesture by a government entity of its equity in a state-owned
company, either through an asset sale, public offering or privatisation programme. It does notnecessarily entail investment in the construction and refurbishment of infrastructure assets by theprivate sector, as is usually the case with public-private partnerships projects. It Private investors whoenter into privitisations expect to extract higher returns from the acquired assets by their ability to
reduce costs or increase revenues, and hopefully both, (e.g. through better demand management andfurther real estate developments). However, depending on regulatory requirements in place, this does
not necessarily exclude the potential for a growth strategy and expansion of infrastructure. It represents,
thus, an important channel through which the private sector can potentially raise efficiency ininfrastructure delivery.
Since the privatisation of transport infrastructure peaked in the late 1990s in OECD and non-OECD
countries, it declined drastically in value and number in OECD countries during the 2000s (Figure 4). 17 In
non-OECD countries, privatisations which had also declined in the early 2000s, started to recover alreadyin the mid-2000s. Since 2010, however, privatisation has risen in both groups. From 2011 to 2014,privatisations represented 24% and 36% of the transport sector deals in value terms in OECD and nonOECD countries respectively. This, opposed to 8% and 13% respectively in the 2006-2010 period. In
OECD countries, this is mostly due to a few large deals in a limited number of countries. In non-OECD
countries, a few large deals are also behind the rise in privatisations in the period, but the number ofprivatisation deals has also risen since early 2000s.

18© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Figure 4. Privatisations in transport infrastructure% of total M&A, USD value% of total M&A, # of projects

80%

OECD countries
25%

Non-OECD countries% of total # of projects, 1995-2014

70%
20%

60%
50%

15%

40%
10%

30%
20%

5%

10%
0%

0%

OECD countries

Airports

Ports

Railroads

Roads

Non-OECD countries

Note: Data comprise 3300 M&A deals from 1995 to 2014, which resulted in the ownership by the acquirer
company of at least 10% of the shares of the acquired company after the transaction, excluding deals in which theacquirer is a government body or entity that is 50% or more owned by the government and is not publicly traded.
Only deals in which the target company’s primary Sector Industry Classification corresponds to infrastructuretransport sectors were included (4581 – airports and airport terminal services; 4493 and 4491 – marinas andmarina cargo handling; 4011, 4013 and 4111 – railroad switching and terminal establishments, railroad switching
and terminal establishments and local and suburban transit; 4785 and 4173 – inspection and fixed facilities formotor vehicles and bus terminal and service facilities). Data, however, needs to be interpreted with caution as only
53% the registered deals contain information on the transaction value.
Source: Thomson Reuters (n.d.).

The sectoral distribution of privatisation differs somewhat between OECD and non-OECD countries, as
illustrated in the second graph of Figure 4. Non-OECD countries have more prominently privatised
airport and railroad assets. This holds true in value terms, too. In OECD countries, privatisations weremore evenly distributed across transport sub-sectors, with road assets being slightly higher in value
terms and ports at the lower end. But in number of deals, roads and airports have been the most active
sectors, followed by railroads and ports respectively. The relative uptake in airport privatisations partly
reflects governments' fiscal constraints, which has enticed them to sell off assets (PWC, 2013). The
privatisation trend, however, is unlikely to be confined to Eurozone countries.

Foreign investment plays larger role in OECD and non-OECD
countries alike
Participation by foreign investors in transport infrastructure projects has been significant across OECDand non-OECD countries (Figure 5). They can often mobilise international resources, both financial andmanagerial, that are not readily accessible to domestic investors. With those resources, foreign investors
are usually well positioned to undertake and manage the characteristics of typically long-term, large
scale infrastructure projects that involve complex contractual and financial structures. From 1995 to2016, foreign sponsors were involved in projects totalling 57% of investments in transport infrastructure
in OECD countries and 31% in non-OECD countries (49% and 28%, respectively, in terms of number ofprojects).(18)(19) Unfortunately, the available data does not allow for distinguishing between the share of© OECD/ITF 2019

19

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

foreign and domestic investors in each project, and thus neither is the precise amount of investment byforeigners in transport infrastructure. Nonetheless, the relatively high share of projects involving foreignsponsors attests to their importance in infrastructure markets.
Figure 5. Foreign investment in transport infrastructure
OECD countries
Total
140000Non-OECD countries

Foreign sponsor participation

Constant 2014 international dollar, million

Total
140000120000120000100000100000

80000

80000

60000

60000

40000

40000

20000

20000

0

0

Foreign sponsor participation

Constant 2014 international dollar, million

Note: Foreign sponsor participation refers to the involvement of one or more foreign companies holding a stake inthe project company carrying out the project, generally by providing financial support through an equity injection.
See also notes to Figure 2 for further data-related information.
Source: Dealogic (n.d.).

Domestic sponsors are, nonetheless, playing an increasing role in infrastructure projects, most notably inthe large emerging non-OECD countries, as shown in the second graph of Figure 5. The importance of
foreign investors to infrastructure projects has been given a prominent role in the infrastructure debate.
As large-scale projects often surpasses a country’s financing capacity, it must depend on both foreign
debt and equity financing to some extent.In the early 2000sit was relatively common for infrastructure
projects to largely rely on foreign equity sponsors. In non-OECD countries, transport infrastructure
projects with foreign sponsor participation represented almost 60% of total project value and 70% in
terms of number of deals reaching financial closure in the period. But since the boom of private
investment in infrastructure in the mid-2000s in these countries, domestic sponsors have become more
prominent. From 2006 to 2010, investments in projects with only domestic sponsors amounted to tentimes the amount observed in the previous five-year period.
Foreign participation in transport sub-sectors differs across OECD and non-OECD
countries

The share of foreign sponsor participation across transport sub-sectors also reflects some distinct
characteristics of the two country groups. In OECD countries, foreign sponsor participation has been
relatively greater in the ports and roads sub-sectors (Figure 6). In non-OECD countries, however, foreignsponsor participation has been the lowest in the roads sectors. Foreign sponsors have been more
involved in airport and ports projects, although this may vary considerably across countries.

20© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Figure 6. Foreign investment in transport infrastructure by sub-sector
Foreign sponsor participation

100%

Domestic sponsors only

Sponsors nationality not available% of total cumulated investment, 1995-2016

90%
80%
70%
60%
50%
40%

30%
20%
10%
0%

Airports

Ports

Railroads
Roads
OECD (n=911 deals)

Total

Airports

Ports
Railroads
Roads
Non-OECD (n=854 deals)

Total

Note: The white column range refers to the total project amount of deals for which information on the sponsors
nationality is not available in the database. In total, roughly 9% of the projects, corresponding to 5% of total
project amount, do not contain information on the nationality of the sponsor. See also notes to Figure 2 for further
data-related information.
Source: Dealogic (n.d.).

Again, this may reflect more difficult economic conditions for private investments in the road sector in
non-OECD countries in general, particularly when the transition to private provision of suchinfrastructure projects is associated with the introduction of “user pay” systems for services which werepreviously perceived by the population as “free” (Estache, Ellis and Trujillo, 2007). Potentially greater
political and social sensitivities of such projects may turn away foreign investors more pronouncedly thandomestic ones. Local preconceived ideas about a foreign investor may also make such projects morechallenging. In addition, projects with foreign sponsors may rely relatively more on foreign financing,increasing their exposure to currency fluctuations when revenues are earned in local currency (Harrisand Pratap, 2009). The roads sector would feel the impact of this more than other transport sectors, as
the revenue structure is often established in hard currency. Evidence shows that, for any of thesereasons, projects with foreign sponsor participation are more prone to cancellations (Harris andPratap, 2009).

Financing for long-term infrastructure projects rebounds post-crisis
Long-term infrastructure projects are no longer hindered by the lack of investment that crippled themafter the 2008 global financial crisis (Freshfields Bruckhaus Deringer, 2014; PWC, 2014). The liquidity dryup following the crisis in the traditional bank-financing market for infrastructure has mostly reversed.
Current market conditions are characterised by strong bank liquidity across most infrastructure market
segments, notably in OECD countries (BNP Paribas, 2015). Interest rates have held at historical lows andbanks’ financial and capital positions have improved. Freshfields Bruckhaus Deringer (2014) highlightsthat there are more banks in the market now than two years ago, and that the shortage of soundprojects in the pipeline, both greenfield and brownfield, is holding back greater investment levels.

© OECD/ITF 2019

21

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

PWC (2014), however, notes that although liquidity has returned, the financing conditions are relatively
different from those observed before the crisis, with relatively shorter tenors, higher margins and more
restrictive covenants, all of which have important potential implications. Shorter maturities, for instance,increase refinancing risks, and higher margins may make some projects unviable, placing increased needson the government to bridge financing gaps. In this respect, the crisis may have allowed for an
adjustment of expectations and appreciation of such projects by investors. In the past, project finance
had been extended to a variety of sectors and projects, sometimes with only limited understanding of
the risks entailed. After the crisis, emerging evidence seems to suggest a significant shift in the risk
profile of projects reaching financial closure, at least in the largest OECD transport PPP markets, withalmost solely availability-payment projects obtaining financing (Makovšek, 2019). With the banks’appetite for long-term infrastructure projects recovering and competition from long-term institutional
investors strengthening, financing conditions in the most competitive markets began to improve again in
2015, driving down margins in some cases and permitting longer tenors once again to be achieved (BNP
Paribas, 2015). In some segments of the market at least, this may reflect the fact that projects coming tosurface entail lower risks to investors, as mentioned above (Makovšek, 2019).
The availability of other non-bank sources of capital, such as insurance companies and private equity
funds, has also increased, partly reflected in the levels of capital raised by unlisted infrastructure funds.
Based on data from Preqin, Freshfields Bruckhaus Deringer (2014) reports an all-time high in 2014 with
149 funds in the market targeting USD 90 billion in capital commitments. In the current context of low
interest rates, institutional investors and asset managers have increasingly sought out higher yield
investment opportunities and diversification, particularly where they can match their longer duration or
inflation-linked obligations (e.g. pension funds and life insurance companies). Infrastructure funds
provide them with an opportunity to invest equity into a wide range of infrastructure projects with theaim to diversify the bulk risk of individual projects.
However, despite increasing appetite, only a fraction of institutional assets are being channelled into
infrastructure. In OECD countries, for instance, institutional investors hold about USD 83 trillion in assets
under management, but only about 1% is currently allocated to direct infrastructure assets. In emerging
markets, too, institutional investors are building large assets bases, but investment trends often follow
the same pattern (Della Croce and Gatti, 2014).

Bond financing recovers strongly after the crisis
Following similar trends in the financial industry, bond financing for transport infrastructure projects hasrecovered strongly in recent years (Figure 7). It had shrunk considerably in the years following thefinancial crisis, partly due to the demise of monoline insurance companies during that period (Della
Croce and Yermo, 2013).20 In principle, bond financing is a natural and economically appropriate
financing instrument for infrastructure projects, notably for their operational phase.21 Bond issues arenormally larger and offer longer maturities than typical bank loans, allowing debt service costs to extend
over longer periods, reducing refinancing risks and better matching the long-term nature of
infrastructure assets.

22© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Figure 7. Financing structures in OECD and non-OECD countries
Loan amount
100%

Bond amount

Equity amount

Missing information% of project amount, 1995-2016

90%
80%

70%
60%
50%
40%
30%

20%
10%
0%
OECD

non-OECD countries

Note: The white column refers to the total amount of deals for which information on the financing structure is notavailable in the database. See also notes to Figure 2 for further data-related information.
Source: Dealogic (n.d.).

Bond financing has particularly increased in recent years in OECD countries (albeit mostly specifically inAustralia, Canada, the United States and the United Kingdom) where deeper capital markets exist andinstitutional investors and asset managers have increasingly sought out higher yield investment
opportunities and diversification. Between 2011 and 2016, bond financing accounted for 13% oftransport infrastructure financing in OECD countries, compared to only 3% in the 2006-2010 period.
The current uptake in bond financing also suggests that some institutional investors are increasingly
more comfortable assuming risks they would generally not have before (e.g. construction risk).
Construction-related risks, such as cost overruns and delays, which have often scared investors away,seem to be limited and diversifiable from the view of point of investors in the project company (BlancBrude and Makovsek, 2013). The uptake may also reflect, to some extent, credit enhancement solutions
put in place recently by development banks and multilateral agencies, such as the European Investment
Bank’s Project Bond Credit Enhancement Initiative, which have likely helped to enhance projects’ credit
quality and address investors’ concerns (Freshfields Bruckhaus Deringer, 2014).

The increased role of export credit agencies in infrastructure
financingSince the crisis, export credit agencies (ECA) have also stepped up and are playing an increasingly
important role in the financing of large infrastructure projects, notably in greenfield projects in emerging
economies (Ehlers, 2014). For projects in Africa, in particular, their involvement has been crucial tosecuring project financing (Baker and McKenzie and IJGlobal, 2014). In other regions, including in the
Middle East and Asia, the number of projects relying to some extent on support from ECA has grown
substantially in recent years, though their involvement has been more limited in terms of deal values.
ECAs are also becoming more involved in unwinding traditional bank finance for infrastructure projects.

© OECD/ITF 201923

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Banks are allowed to allocate lower levels of capital to ECA-backed projects, which has led to a push for
greater ECA coverage and ECA direct financing in infrastructure markets, including, to some extent, in
advanced economies (Rhoades, 2012; Ehlers, 2014).

Project refinancing levels soar
Project refinancing is a common characteristic of long-term infrastructure projects. Their financing
structure and terms are normally contracted at financial closure based on the market conditions at thetime. Traditional bank financing, however, is typically only available at shorter maturities than the
project’s full lifecycle. In addition, a project’s risk profile evolves during its lifecycle (e.g. after
construction phase) and market conditions may change. The project company may, therefore, wish torefinance in order to benefit from potentially improved market conditions (e.g. longer maturities or
reduce interest costs). Potential benefits of refinancing can include lower overall costs for users and thegovernment and higher returns to investors, but it does not itself lead to additional investment by the
project. As refinancing can sometimes lead to changes in the composition of capital structure andfinanciers, contracts normally require consent from the contracting authorities and regulate theconditions for sharing any potential gains among the project company and the contracting authority.
Refinancing in OECD countries has intensified notably since 2010 with the current low-interest rateenvironment (Figure 8). Moreover, according to J.P. Morgan (2011), a large amount of debt raised tofinance infrastructure assets in the years before the global financial crisis was estimated to have five- toseven-year terms. This implies that all or part of the existing debt would need to be refinanced at theend of such periods anyway. Project bonds have notably provided an alternative pool of liquidity forrefinancing in this context, and particularly in view of banks’ constraints in providing long-term finance.
In OECD countries, from 2011 to 2016, roughly 40% of transport infrastructure deals constituted
refinancing, compared to only 15% in non-OECD countries. Non-OECD countries saw a peak in 2010 due
to a few large refinancing deals. It rose again in 2014 and 2015, but remains a minor phenomenon.
Figure 8. Total and refinancing amounts for transport infrastructure projects
between 1995 and 2016
OECD countries
Total, incl. refinancing

160000constant 2014 international dollar, million

Non-OECD countries
Refinancing

Total, incl. refinancing

160000140000140000120000120000100000100000

80000

80000

60000

60000

40000

40000

20000

20000

0

0

Refinancing

constant 2014 international dollar, million

Note: See notes to Figure 2 for further data-related information.
Source: Dealogic (n.d.).

24© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Conclusion
This report has provided initial evidence on how private and foreign investment has been channelled into
different transport infrastructure sub-sectors across OECD and non-OECD countries. It represents a firstattempt to quantify private and foreign investment in transport infrastructure at more disaggregatedlevels in a large range of countries, and by no means provides an exhaustive picture. It is original in that itprovides for a first description of foreign participation in transport infrastructure. The report also
highlight that informed policy-making in both OECD and non-OECD countries is severely constrained by
the dearth of relevant and readily available data on public and private investment in infrastructure subsectors. At present, more data are available for developing countries through the World Bank’s Private
Sector Participation database than for OECD countries.
Further work is required to collect data on the level and characteristics of private and public investments
in transport infrastructure at a disaggregated level. Such data would make it possible to investigate
pertinent questions for policy-making, ultimately enabling the empirical assessment of different policies
and incentive frameworks for private participation. The OECD is uniquely placed to launch a systematic
data collection exercise on the stock, trends and characteristics of investments infrastructure at adisaggregated level. This is now partly the objective of the Joint Infrastructure Data Initiative developedby the OECD, the European Investment Bank, the Global Infrastructure Hub, and the Long Term Investor
Club and Long Term Infrastructure Investors Association, which was formally launched at the end of 2017with the support of the G20-OECD Task Force on Institutional Investors and Long-term Financing. The
initiative aims to address the issue of establishing infrastructure as an asset class through data collection
and improving the availability of infrastructure investment data.

© OECD/ITF 2019

25

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Notes

1 The greatest beneficiaries from investment in transport infrastructure are likely to be developing countries. Evidence suggests that suchinvestment induces greater economic growth and reduces income inequality and regional disparities within those countries. In developed
economies the impacts are generally much smaller since the transport networks are mainly built out, meaning that infrastructure investment toa larger extent goes into improving what is already there (e.g. addressing bottle necks or improving quality) (Estache and Garsous, 2012).
2 A lack of financing is most likely not what is preventing the government and the private sector from bridging the remaining investment gap.
While more stringent financial regulations imposed after the 2008 financial crisis may have limited the availability of traditional long-term bankfinancing for infrastructure in the crisis aftermath to some extent, it no longer seems to be a barrier. Moreover, long-term institutional capital
may be well placed to fill some of the needs. In OECD countries, for instance, institutional investors hold about USD 83 trillion in assets undermanagement, but only about 1% is currently allocated to direct infrastructure assets. In emerging markets, too, institutional investors arebuilding large assets bases, but investment trends often follow the same pattern (Della Croce and Gatti, 2014). In addition, evidence suggeststhat infrastructure companies have been hoarding cash since the crisis and refraining from undertaking long-term investments, despite the lowinterest rate environment (Blundell-Wignall and Roulet, 2013).
3 For ease of reading, the terms “private investment” and “private participation” are used interchangeably to describe the project-based data
used, although these do not adequately reflect gross fixed capital formation data. The distinction between private investment and private
participation is treated in Makovšek (2019).
4 Empirical work conducted at the OECD attests to the costs of such renegotiations for road concessions in Latin America. The findings suggestthat weak State institutions, unclear legislation and deficient contract design have allowed for frequent and costly renegotiations in the
countries analysed. Renegotiations initiated by the state, which were more common than firm-led renegotiations, were often associated withthe political cycle. It is estimated that renegotiations occurred on average only two years after the signing of such contracts, and the averagecontract is renewed annually. The direct fiscal costs of such renegotiations were worth USD 7 billion. Other costs included average increases inconcessions’ terms by 20%, higher toll prices, greater risks faced by the State and delays in construction deadlines (Bitran, Nieto-Parra andRobledo, 2013; OECD/CAF/UN ECLAC, 2013).
5 “Project finance is the financing of long-term infrastructure […] and other projects / public services based upon a limited recourse financial
structure where project debt and equity used to finance the project are paid back from the cash flow generated by the project (typically, a
special purpose entity (SPE) or vehicle (SPV)).” (Della Croce and Gatti, 2014)
6 According to data from the World Bank Private Participation in Infrastructure database, lease and management contracts represent less than
1% of investment commitments in infrastructure transport projects across sub-sectors from 1990 to 2014, with the exception of airports where
they are relatively more important and represent roughly 8%.
7 Wagenvoort, De Nicola and Kappeler (2010) draw on existing public national account statistics and commercial project-based databases toestimate the relative importance of private and public investment into infrastructure. While their methodological approach is insightful for theoverall level of investment in infrastructure sectors, the level of disaggregation achieved through their methodology is unfortunately limited to
the level of disaggregation available in national accounts. It is thus impossible to replicate it at more disaggregated transport sub-sector levels,
for instance, as official statistics are not available.
8 In several countries, national account statistics are still reported following the International Standard Industrial Classification (ISIC Rev. 3.1) of
economic activities, which does not provide for greater disaggregated information. Several OECD countries have already adopted the newer ISIC
Rev. 4 classification, which provides for further breakdowns. However, the availability of reported data remains limited with regards toinvestment in transport.
9 Under the current system of national accounts rules, investments by state-owned enterprises are classified under the corporate sector if these
entities charge market prices or prices that cover more than 50% of costs. Otherwise, they are classified under the general government sector.
10 At the onset, the decision to award an existing or new infrastructure to a private party remains essentially with the government. This partly
explains, for instance, the relatively higher levels of private participation in roads within some OECD countries, such as France, Italy and Portugal,
which have largely opted for highway concessions to the private sector, compared to the levels observed in Germany, which have kept most of
the network in the public sector (ITF, 2008).
11 European banks accounted in the past for the largest share of the global project finance market, but have scaled back since the crisis (OECD,2013). Historically, they have played a significant role in the syndication of bank financing for large infrastructure projects in emerging anddeveloping economies (World Bank, 2013), but also to some other important developed PPP markets, such as Canada (Woodman, 2006; PWC,
2013).

26© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

12 Under Basel III, tighter regulatory capital requirements have been specified. Banks are now required to allocate greater percentage of theirliquidity to back long-term commercial debt financing.
13 Credit spreads have been very stable over the last 12 years, trending higher in the last three as funding banks have recognised the need forhigher margins to compensate for higher capital requirements under Basel II and III regulations (BlackRock, 2014).
14 The number of road projects during the period accounts for roughly 56% of total projects. The remaining projects were distributed relatively
evenly across the other transport sub-sectors. The average railroad project was almost 2.3 times greater than the average port project, 1.8 times
greater than the average road project and roughly 1.3 times greater than the average airport project.
15 A two sided t-test with unequal variance and a Wilcoxon rank sum test were performed to check if differences in means and magnitudes
across OECD and non-OECD countries were significant at a 5% significance level. It revealed that the differences in means and values across bothgroups of countries are significant in the roads and railroads sectors only.
16 Privatisations reported here comprise all M&A deals which resulted in the ownership by the acquirer company of at least 10% of the sharesof the acquired company after the transaction. This follows the standard definition of lasting interest by international organisations, such as theOECD and IMF. Therefore, deals where private investors have sought a stake of 10% or more of the voting capital, but the government continues
to retain a controlling interest through majority-ownership or “golden shares”, are counted as privatisations, despite the private sector’s limited
role in the management of the company. Although the private sector’s potential to raise the efficiency level of a privatised company comes
mostly in the cases where government has divested to a minority shareholding level, these deals could not be screened in the database.
17 These figures must be considered with caution as the quality of the data is uncertain, notably for the early periods. Data is based on Thomson
Reuters – Thomson One M&A database. It comprises 3 300 M&A deals from 1995 to 2014, where the acquirer company gained ownership of atleast 10% of the shares of the acquired company after the transaction (as per the standard foreign direct investment definition). However, thisexcludes deals in which the acquirer is a government body or an entity that is 50% or more government-owned and is not publicly traded. Only
deals in which the target company’s primary Sector Industry Classification corresponds to infrastructure transport sectors were included. Thatsaid, only 53% of the registered deals contain information on the transaction value.
18 Sponsors refer to the company, or group of companies (in the case of a consortium), bidding to carry out the project, generally providing
financial support through an equity injection if successful.
19 The shares are estimated based on the number of projects for which data on sponsor nationality is available. Information is missing for lessthan 9% of the projects and less than 7% in terms of value.
20 Until the crisis it was common for infrastructure project bonds to be secured by some sort of credit enhancement mechanisms, most notably
by insurance provided by highly rated monoline insurance companies (Della Croce and Gatti, 2014).
21 Once operational – i.e. after construction – infrastructure projects are said to provide relatively stable cash flows, and default risks generally
decline overtime. In contrast, risk is higher in the initial phase and debt restructurings are relatively more common during the construction
phase. Bank finance is thus more appropriate at this stage as banks can more easily restructure existing loans, but their short-term liabilities
inevitably limits the maturity of assets they can safely hold. As such, bonds tend to come into play when initial bank loans are being refinanced
as projects enter the operation phase (Ehlers, 2014). After 5 years, cumulative default rates of investment-grade infrastructure bonds are much
lower than of non-financial corporate issuers (Moody’s Investors Service, cited in Ehlers, 2014). Bitsch, Buchner and Kaserer (2010) also find that
default risk is significantly lower in infrastructure investments than in non-infrastructure investments. However, the authors do not findevidence of greater cash flow stability of infrastructure. investments as normally advocated.

© OECD/ITF 2019

27

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

References
Andrew, D. and S. Dochia, (2006), “The growing and evolving business of private participation in airports:
New trends, new actors emerging”, GridLines, Brief no. 37551, Note no. 15, PPIAF, The World Bank,
Washinton, DC, http://documents.worldbank.org/curated/en/916861468158995504/The-growing-andevolving-business-of-private-participation-in-airports-new-trends-new-actors-emerging.
Araya, G., J. Schwartz, and L. Andres (2013),” The effects of country risk and conflict on infrastructure
PPPs”, The World Bank Policy Research Working Paper, No. WPS6569, The World Bank, Washington, D.C,
http://documents.worldbank.org/curated/en/241991468159603304/The-effects-of-country-risk-andconflict-on-infrastructure-PPPs.
Bain, R. (2009), “Error and optimism bias in toll road traffic forecasts”, Transportation, Vol. 36/5,
pp. 469–482, Springer US, https://doi.org/10.1007/s11116-009-9199-7.
Baker and McKenzie and IJGlobal (2014), “Global update and Africa focus: Export credit anddevelopment finance”, https://www.bakermckenzie.com/-/media/files/insight/publications/2014/09/global-update-and-africa-focus-export-credit-and__/files/read-publication/fileattachment/
arfc_bf_exportcreditreport_sep14.pdf (accessed on 12 March 2019).
Basilio, M. (2011), “Infrastructure PPP investments in Emerging Markets”, Paper presented at theEuropean Financial Management Association, 2011 Annual Meeting, Braga, www.researchgate.net/
publication/265219817_Infrastructure_PPP_investments_in_Emerging_Markets.
Bitran, E., S. Nieto-Parra and J. Robledo (2013), “Opening the Black Box of Contract Renegotiations: An
Analysis of Road Concessions in Chile, Colombia and Peru”, OECD Development Centre Working Papers,
No. 317, OECD Publishing, Paris, https://doi.org/10.1787/5k46n3wwxxq3-en.
Bitsch, F., A. Buchner and C. Kaserer (2010), “Risk, Return and Cash Flow Characteristics of Infrastructure
Fund Investments”, EIB Papers, Vol 15/1, pp. 106-136, European Investment Bank.
BlackRock (2014), “Infrastructure debt: Answers to four common questions”, BlackRock Infrastructure
Investment Group, www.blackrock.com (accessed on 19 January 2016).
Blanc-Brude, F. and D. Makovsek (2013), “Construction Risk in Infrastructure Project Finance”, EDHEC
Business School Working Paper, EDHEC Business School,www.researchgate.net/publication/236007050_Construction_risk_in_infrastructure_project_finance.
Blundell-Wignall, A. and C. Roulet (2013), “Long-term investment, the cost of capital and the dividend
and buyback puzzle”, OECD Journal: Financial Market Trends, Vol. 2013/1, https://doi.org/10.1787/fmt2013-5k41z8t05l8s.
Burger, P. et al. (2009), “The Effects of the Financial Crisis on Public-Private Partnerships”, IMF Working
Paper, No. WP/09/144, International Monetary Fund, New York, www.imf.org/external/pubs/ft/wp/
2009/wp09144.pdf.
Dealogic (n.d.), Dealogic ProjectWare (database), www.dealogic.com (accessed on 19 January 2016).

28© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Della Croce, R. and J. Yermo (2013), “Institutional Investors and Infrastructure Financing”, OECD Working
Papers on Finance, Insurance and Private Pensions, No. 36, OECD Publishing, Paris, https://doi.org/
10.1787/5k3wh99xgc33-en.
Della Croce, R. and S. Gatti (2014), “Financing infrastructure – International trends”, OECD Journal:
Financial Market Trends, Vol. 2014/1, https://doi.org/10.1787/fmt-2014-5jxvpb4jfrf1.
Ehlers, T. (2014), “Understanding the challenges for infrastructure finance”, BIS Working Papers, No. 454,
Bank for International Settlements, Basel, www.bis.org/publ/work454.htm.
Engel, E., R. Fischer and A. Galetovic (2009), “Public-Private Partnerships: When and How”, Documentode Trabajo, No. 257, Centro de Economía Aplicada, Universidad de Chile, Santiago, http://econ.uchile.cl/
uploads/publicacion/c9b9ea69d84d4c93714c2d3b2d5982a5ca0a67d7.pdf.
Estache, A., J. Ellis, and L. Trujillo (2007), “Public-private partnerships in transport”, Policy ResearchWorking Paper, No. 4436, World Bank, Washington, D.C., http://documents.worldbank.org/curated/
en/255351468134395315/Public-private-partnerships-in-transport.
Estache, A. and G. Garsous (2012), “The impact of infrastructure on growth in developing countries”, IFC
Economics Notes, Note 1, International Finance Corporation, Washington, D. C., https://www.ifc.org/
wps/wcm/connect/054be8804db753a6843aa4ab7d7326c0/INR+Note+1+-+The+Impact+of+
Infrastructure+on+Growth.pdf?MOD=AJPERES (accessed on 19 January 2016).
Estache, A. (2010), “Infrastructure finance in developing countries: an overview”, EIB Papers, Vol. 15/2,
European Investment Bank, Luxembourg, www.researchgate.net/publication/254448619_
Infrastructure_finance_in_developing_countries_An_overview.
Flyvbjerg, B., M. Skamris Holm, and S. Buhl (2005), “How (In)accurate are Demand Forecasts in Public
Works Projects? The Case of Transportation”, Journal of the American Planning Association, Vol. 71/2,
pp. 131–146, DOI: 10.1080/01944360508976688.
Flyvbjerg, B., M. Skamris Holm, and S. Buhl (2006), “Inaccuracy in Traffic Forecasts”, Transport Reviews,
Vol. 26/1, pp. 1–24, DOI: 10.1080/01441640500124779.
Freshfields Bruckhaus Derringer (2014), “Europe: Time to Act – What’s in the Infrastructure Pipeline?
Outlook for Infrastructure 2014”, Presentation to stakeholders from the infrastructure market,
Freshfields Bruckhaus Derringer, http://www.freshfields.com/uploadedFiles/SiteWide/
News_Room/Insight/Project_Bonds/Outlook% (accessed on 19 January 2016).
Gillen, D. (2007), “The Regulation of Airports”, Centre for Transportation Studies Working Paper, No.
2007-5, Sauder School of Business, University of British Columbia, Vancouver,www.sauder.ubc.ca/Faculty/Research_Centres/Centre_for_Transportation_Studies/~/media/Files/Facult
y%20Research/OPLOG%20Division/OPLOG%20Publications/GILLEN/Gillen%20-%20Regulation.ashx.
Gonzalez Alegre, J. et al. (2008), “Composition of government investment in Europe: Some forensic
evidence”, EIB Papers, Vol 13/1, European Investment Bank, www.eib.org/en/infocentre/publications/
all/eibpapers-2008-v13-n01.htm.
Hammami, M., J-F. Ruhashyankiko and Yehoue, E. (2006), “Determinants of Public-Private Partnerhsips in
Infrastructure”, IMF Working Paper, No. 06-99, International Monetary Fund, New York, www.imf.org/
en/Publications/WP/Issues/2016/12/31/Determinants-of-Public-Private-Partnerships-in-Infrastructure19086.

© OECD/ITF 2019

29

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Harris, C. and K. Pratap, (2009), “What drives private sector exit from infrastructure? Economic crises andother factors in the cancellation of private infrastructure projects in developing countries”, Gridlines,
Brief no. 47884, Note no. 46, PPIAF, The World Bank, Washington, D.C.,
http://documents.worldbank.org/curated/en/867251468150306230/What-drives-private-sector-exitfrom-infrastructure-Economic-crises-and-other-factors-in-the-cancellation-of-private-infrastructureprojects-in-developing-countries.
Inderst, G. (2013), “Private Infrastructure Finance and Investment in Europe”, EIB Working Papers, No.
2013/02, European Investment Bank, Luxembourg, www.eib.org/attachments/efs/economics_working_paper_2013_02_en.pdf.
Izaguirre, A. and S. Prakash Kulkarni (2011), “Identifying Main Sources of Funding for Infrastructure
Projects with Private Participation in Developing Countries: A Pilot Study”, PPIAF Working Paper, No. 9,
The World Bank, Washington D.C.
ITF (2008), Transport Infrastructure Investment: Options for Efficiency, OECD/ITF Publishing, Paris,
www.itf-oecd.org/sites/default/files/docs/08infrinvest.pdf.
J.P. Morgan (2011), “The Infrastructure Moment: Favourable Trends in Infrastructure Financing”, J.P.
Morgan Chase and Co., New York, https://www.jpmorgan.com/cm/BlobServer/
The_Infrastructure_Moment.pdf?blobkey=id&blobwhere=1158642858150&blobheader=application%2F
pdf&blobheadername1=CacheControl&blobheadervalue1=private&blobcol=urldata&blobtable=
MungoBlobs (accessed on 19 March 2019).
KPMG (2015), “Public-Private Partnerships: Emerging global trends and the implications for future
infrastructure development in Australia”, KPMG brochure, https://assets.kpmg/content/dam/
kpmg/pdf/2015/06/public-private-partnerships-june-2015.pdf (accessed on 04 March 2019).
Makovšek, D. (2019), “What is Private Investment in Transport Infrastructure and Why Is It Difficult?”,
Working Group Paper, International Transport Forum, Paris.
Makovšek, D. (forthcoming), “The Role of Private Investment in Transport Infrastructure”, Working
Group Paper, International Transport Forum, Paris.
Moszoro, M. et al. (2014), “Institutional and Political Determinants of Private Participation in
Infrastructure”, International Transport Forum Discussion Papers, No. 2014/15, OECD Publishing, Paris,
https://doi.org/10.1787/5jrw2xzj0m7l-en.
OECD (2007), Infrastructure to 2030 (Vol. 2): Mapping Policy for Electricity, Water and Transport, OECD
Publishing, Paris, https://doi.org/10.1787/9789264031326-en.
OECD (2012), Strategic Transport Infrastructure Needs to 2030, OECD Publishing, Paris,
https://doi.org/10.1787/9789264114425-en.
OECD (2013), The Role of Banks, Equity Markets and Institutional Investors in Long-Term Financing for
Growth and Development: Report for G20 Leaders, report presented at the Meeting of the G20 Finance
Ministers and Central Banks Governors on 15-16 February 2013 in Moscow, www.oecd.org/finance/
private-pensions/G20reportLTFinancingForGrowthRussianPresidency2013.pdf (accessed 12 March2019).
OECD (2015), OECD Economic Outlook, Volume 2015, OECD Publishing, Paris.

30© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

OECD (n.d.) “Total and government investment in transport infrastructure in OECD countries”, OECD
National Accounts Statistics (database), OECD Publishing, Paris, https://doi.org/10.1787/na-data-en(accessed on 19 January 2016).
OECD/CAF/UN ECLAC (2013), Latin American Economic Outlook 2014: Logistics and Competitiveness forDevelopment, OECD Publishing, Paris, https://doi.org/10.1787/leo-2014-en.
Oxera and RBconsult (2012), “Disincentivising overbidding for toll road concessions”, Report prepared for
the Australian Department for Transport and Infrastructure, https://www.oxera.com/wpcontent/uploads/2018/03/Disincentivising-overbidding-for-toll-road-concessions.pdf.
Perkins, S. (2013), “Better Regulation of Public-Private Partnerships for Transport Infrastructure:
Summary and Conclusions”, International Transport Forum Discussion Papers, No. 2013/6, OECD
Publishing, Paris, https://doi.org/10.1787/5k46n41s7347-en.
PWC (2013), “Capital Markets: The Rise of Non-Bank Infrastructure Project Finance – Talking Points”,
PWC paper, PricewaterhouseCoopers LLP, https://www.pwc.com/gx/en/capital-projectsinfrastructure/publications/assets/pdfs/pwc-capital-markets-the-rise-of-non-bank-infrastructure-projectfinance.pdf (accessed on 04 March 2019).
PWC (2014), “Developing Infrastructure in Asia Pacific: Outlook, Challenges and Solutions”, PWC paper,
PricewaterhouseCoopers LLP, https://www.pwc.com.au/industry/infrastructure/assets/developinginfrastructure-asia-pacific-sep14.pdf (accessed on 04 March 2019).
PWC (2015), “Airport Transactions: Airport Privatisations Elevate Deal Activity to Higher Altitudes”, PWC
paper, PricewaterhouseCoopers LLP, https://www.pwc.com/gx/en/capital-projectsinfrastructure/pdf/pwc-airport-transactions.pdf (accessed on 04 March 2019).
Rhoades, T. (ed.) (2012), “Project Finance”, in Euromoney Encyclopedia of Debt Finance, 2nd edn.,
Euromoney Institutional Investor PLC, London.
Sharma, C. (2012), “Determinants of PPP in infrastructure in developing economies”, Transforming
Government: People, Process and Policy, Vol. 6/2, pp. 149-166, https://doi.org/10.1108/
17506161211246908.
Sutherland, D. et al. (2011), “Public Policies and Investment in Network Infrastructure”, OECD Journal:
Economic Studies, Vol. 2011/1, https://doi.org/10.1787/eco_studies-2011-5kg51mlvk6r6.
Thomson Reuters (n.d.), Thomson Reuters One (database), https://www.thomsonone.com/
DirectoryServices/2006-04-01/Web.Public/Login.aspx?brandname=www.thomsonone.com&
version=3.7.9.18833&protocol=0 (accessed on 19 January 2016).
Wagenvoort, R., C. De Nicola and A. Kappeler (2010), “Infrastructure finance in Europe: Composition,
evolution and crisis impact”, EIB Papers, Vol. 15, No. 1/2010, European Investment Bank,
www.eib.org/en/infocentre/publications/all/eibpapers-2010-v15-n01.htm.
Woodman, E. (2006), “The market for financing of infrastructure projects through public-private
partnerships: Canadian developments”, Financial System Review, Bank of Canada,
www.bankofcanada.ca/wp-content/uploads/2012/01/fsr-0606-woodman.pdf (accessed on 04 March2019).
World Bank (2013), “Long-term investment financing for growth and development”, Prepared by WorldBank staff and presented to the Meeting of the G20 Ministers of Finance and Central Bank Governors,© OECD/ITF 2019

31

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Moscow, February 2013, www.g20chn.org/English/Documents/PastPresidency/
201512/P020151225691284966192.pdf.
World Bank (n.d.), World Development Indicators (database), https://datacatalog.worldbank.org/
dataset/world-development-indicators (accessed on 19 January 2016).
WEF (2013), Strategic Infrastructure: Steps to Prepare and Accelerate Public-Private Partnerships, World
Economic Forum, Geneva, www.weforum.org/reports/strategic-infrastructure-steps-prepare-andaccelerate-public-private-partnerships.

32© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Appendix 1: PSPI and characteristics

Characteristics

Forms of PSPI
Servicecontract(outsourcing)

Management
contract

Lease/
affermage

Governmentfunded BOT
and variants

User-funded
BOT, variants,
existing assets(concessions)

Divestitures(privatisation)

Scope (discrete
piece of network)

Discrete existing
assets andnetwork

Normally
discrete existing
assetsDiscrete existing
assets (e.g. port
terminal) andnetworks(e.g. water)

Discrete new
assets or
refurbishment

Existing networks
and normallyexisting node
infrastructure(e.g. ports andairports)

Existing networkand node
infrastructure(e.g. ports andairports)

Contract duration

1-3 years

2-5 years

10-20 years

25-30 years

25-30 years

Perpetual/subject to license

Commercial/
demand risk forthe private party

None

None

Yes

Both options (yesor no)

Both options (yesor no)

Both options (yesor no)

Money at risk
ex ante*

No

No

No

Yes

Both options (yesor no)

Yes

Provider of service

PrivatePrivatePrivatePrivatePrivatePrivateTariff setting

PublicPublicSubject tocontract
performanceparameters/
discretion ofregulator

Mostly fixed, partvariable related
to production
parameters

Subject tocontract
performanceparameters/
discretion ofregulator

Subject tocontract
performanceparameters/
discretion ofregulator

Price regulationNo

No

Yes, in monopoly
situations

No

No/Yes inmonopolysituations

Yes, in monopoly
situations(incentive
regulation)

Private investment
during contract

No

No

No

Small investments/renewals are done by the private party(major expansions/refurbishments in the regulated caseare approved by the public sector/regulator and financedby the private party)

Legal ownership ofassetsPublicPublicPublicPublic/private

Public/private

PrivateCompetition

Ongoing

One time only;
contracts usually
not renewed

One time only;
contracts usually
not renewed

Initial contract
only; subsequent
contracts usuallynegotiatedInitial contract
only;
subsequent
contracts usuallynegotiatedInitial contract
only; periodic
renegotiation
through pricereviews

What PPPs
encompass*Does the private partner have to pay for the contract upfront (e.g. by financing and building the infrastructure)?
In operations where the private party must buy equipment because there is no market for leasing it, this would
also qualify as ex ante money at risk.
Source: Makovšek (2019).

© OECD/ITF 2019

33

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Appendix 2. Summary of Project-Based Data Usedin the Report
Wagenvoort, De Nicola and Kappeler (2010) state that “investment levels” are assumed to be private andreflect the total project amount at financial closure converted to constant 2014 international dollars.
They do so using purchasing power parities and the growth of GDP in constant local currency units fromthe World Bank Development Indicators database. This is complemented by the IMF’s World Economic
Outlook database.1 “Project amount” refers to investments in the form of construction, expansion, andrefurbishment of physical assets, as well as in the financing of acquisitions if the repayment of debt isbased on cash flows of the assets and they are structured like project finance transactions. Refinancing
deals were excluded and treated separately in Section III to the extent that they do not normallyrepresent new or additional investments.

Numberof deals

Project
amount in
USD,
constant
2014
international
dollarProject
amount in
USD,
constant
2014
international
dollar, % of2014 GDP% of total project amount

Total

Total

Total

Airports

Project
country

Ports

Railroads% of number of deals

Roads

Airports

Ports

Railroads

Roads

1995-2016

Albania

3

244

0.82%

44%

0%

0%

56%

33%

0%

0%

67%

Andorra

1

n/a

0.00%

n/a

n/a

n/a

n/a

0%

0%

0%

100%

Angola

1

43

0.02%

0%

100%

0%

0%

0%

100%

0%

0%

Antigua andBarbuda

1

143

7.12%

100%

0%

0%

0%

100%

0%

0%

0%

Argentina

4

1,557

0.16%

0%

0%

25%

75%

0%

0%

25%

75%

Armenia

3

560

2.31%

41%

0%

0%

59%

67%

0%

0%

33%

Australia

102

70,485

6.83%

15%

25%

24%

36%

28%

21%

22%

29%

Austria

3

1,444

0.37%

0%

0%

0%

100%

0%

0%

0%

100%

Azerbaijan

1

45

0.03%

100%

0%

0%

0%

100%

0%

0%

0%

Bahamas6

1,015

11.28%

100%

0%

0%

0%

100%

0%

0%

0%

Belgium

14

5,111

1.07%

0%

27%

20%

54%

0%

29%

29%

43%

Bolivia

1

275

0.39%

0%

0%

0%

100%

0%

0%

0%

100%

Brazil100

48,676

1.49%

12%

24%

17%

47%

12%

21%

16%

51%

Bulgaria

4

1,027

0.86%

53%

24%

0%

23%

25%

25%

0%

50%

Cameroon

1

453

0.67%

0%

0%

0%

100%

0%

0%

0%

100%

1

Although it would likely be more appropriate to adjust according to a specific deflator to gross fixed capital formation (e.g thecost for land and construction of civil engineering), this was not readily available for a significant number of countries covered in
the data. Data was, thus, adjusted as per the general GDP deflator implied in the constant GDP growth in local currency units.

34© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Canada35

22,381

1.43%

9%

3%

19%

70%

9%

9%

17%

66%

Chile

34

11,265

2.84%

13%

9%

5%

72%

12%

15%

6%

68%

China
(People’s
Republic of)Colombia

82

160,980

0.89%

6%

1%

45%

48%

5%

11%

38%

46%

15

11,377

1.78%

20%

15%

4%

61%

20%

27%

13%

40%

Congo

1

15

0.05%

0%

100%

0%

0%

0%

100%

0%

0%

Costa Rica

4

877

1.24%

36%

0%

7%

57%

50%

0%

25%

25%

Cote D'Ivoire

5

1,093

1.51%

3%

0%

33%

64%

20%

0%

40%

40%

Croatia

11

3,849

4.28%

17%

0%

0%

83%

27%

9%

0%

64%

Cyprus*

1

899

3.41%

100%

0%

0%

0%

100%

0%

0%

0%

Czech
Republic

6

2,716

0.85%

20%

0%

65%

15%

17%

0%

67%

17%

Denmark

2

1,068

0.42%

85%

0%

0%

15%

50%

0%

0%

50%

Djibouti

1612

21.36%

0%

100%

0%

0%

0%

100%

0%

0%

Dominican
Republic

4

1,313

0.95%

33%

27%

0%

40%

25%

25%

0%

50%

Ecuador

5

1,238

0.68%

29%

17%

54%

0%

20%

40%

40%

0%

Egypt

7

9,765

1.04%

29%

26%

44%

0%

43%

14%

29%

14%

El Salvador

1

55

0.11%

0%

100%

0%

0%

0%

100%

0%

0%

Estonia

4

212

0.60%

0%

60%

40%

0%

0%

75%

25%

0%

Ethiopia

1

263

0.18%

0%

0%

0%

100%

0%

0%

0%

100%

Finland

6

1,151

0.53%

0%

6%

12%

82%

0%

17%

17%

67%

France39

36,950

1.44%

4%

2%

43%

51%

13%

3%

31%

54%

Germany

24

19,428

0.52%

24%

0%

40%

36%

13%

4%

25%

58%

Ghana

6

3,829

3.50%

0%

100%

0%

0%

0%

100%

0%

0%

Greece14

25,849

9.12%

0%

0%

0%

100%

0%

0%

0%

100%

Honduras

2

153

0.39%

0%

0%

0%

100%

0%

0%

0%

100%

Hong Kong(China)

8

2,021

0.51%

2%

34%

43%

21%

13%

25%

25%

38%

Hungary

13

12,204

5.01%

30%

0%

15%

55%

15%

0%

15%

69%

India

335

200,688

2.72%

5%

12%

12%

72%

3%

13%

4%

79%

Indonesia

29

25,150

0.94%

0%

24%

7%

69%

0%

14%

10%

76%

Iraq

1

1,795

0.34%

0%

100%

0%

0%

0%

100%

0%

0%

Ireland

14

4,353

1.94%

0%

0%

7%

93%

0%

0%

7%

93%

Israel

6

2,940

1.08%

0%

0%

28%

72%

0%

0%

33%

67%

Italy

39

30,941

1.45%

15%

0%

12%

72%

15%

0%

28%

56%

Jamaica

6

2,152

8.91%

13%

23%

0%

64%

33%

17%

0%

50%

Japan

20

6,800

0.15%

65%

2%

11%

22%

35%

10%

20%

35%

Jordan

4

2,525

3.17%

75%

21%

3%

0%

50%

25%

25%

0%

Kazakhstan

1

103

0.02%

0%

0%

100%

0%

0%

0%

100%

0%

© OECD/ITF 201935

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Kenya

3

1,045

0.79%

0%

6%

37%

58%

0%

33%

33%

33%

Korea

65

45,414

2.62%

0%

14%

33%

53%

2%

29%

20%

49%

Latvia

1

100

0.22%

0%

100%

0%

0%

0%

100%

0%

0%

Lebanon

2

169

0.21%

0%

55%

0%

45%

0%

50%

0%

50%

Lithuania

3

560

0.72%

0%

90%

0%

10%

0%

67%

0%

33%

Republic of
North
Macedonia
Malaysia

2

591

2.17%

52%

0%

0%

48%

50%

0%

0%

50%

16

29,007

3.78%

3%

3%

65%

29%

6%

13%

31%

50%

Malta

1

125

0.89%

100%

0%

0%

0%

100%

0%

0%

0%

Mauritius

1

8

0.03%

100%

0%

0%

0%

100%

0%

0%

0%

Mexico46

31,864

1.49%

30%

8%

11%

51%

13%

15%

9%

63%

Moldova

1

24

0.14%

100%

0%

0%

0%

100%

0%

0%

0%

Morocco

2

864

0.33%

0%

38%

62%

0%

0%

50%

50%

0%

Mozambique

1

61

0.20%

0%

100%

0%

0%

0%

100%

0%

0%

Netherlands

24

13,705

1.71%

0%

23%

39%

38%

0%

33%

13%

54%

Netherlands
Antilles

1

n/a

0.00%

n/a

n/a

n/a

n/a

100%

0%

0%

0%

New Zealand

3

1,460

0.89%

6%

0%

0%

94%

33%

0%

0%

67%

Nigeria

1

865

0.08%

0%

0%

0%

100%

0%

0%

0%

100%

Norway

3

632

0.19%

0%

0%

0%

100%

0%

0%

0%

100%

Oman

7

2,718

1.66%

21%

79%

0%

0%

29%

71%

0%

0%

Pakistan

3

3,527

0.40%

0%

18%

0%

82%

0%

67%

0%

33%

Panama15

12,04714.91%

17%

68%

3%

12%

27%

20%

13%

40%

Papua New
Guinea

1

37

0.18%

100%

0%

0%

0%

100%

0%

0%

0%

Peru

19

12,623

3.40%

2%

15%

38%

45%

5%

26%

21%

47%

Philippines

8

7,648

1.11%

15%

1%

65%

18%

13%

13%

25%

50%

Poland

14

8,864

0.94%

12%

5%

2%

81%

21%

21%

14%

43%

Portugal

48

35,62612.07%

0%

1%

19%

80%

0%

6%

10%

83%

Puerto Rico

2

2,431

1.88%

34%

0%

0%

66%

50%

0%

0%

50%

Qatar

3

1,890

0.62%

0%

0%

48%

52%

0%

0%

67%

33%

Romania

6

3,095

0.80%

0%

3%

38%

59%

0%

33%

33%

33%

RussianFederation

11

11,560

0.31%

35%

2%

2%

61%

36%

18%

9%

36%

Saudi Arabia

10

26,992

1.68%

35%

13%

52%

0%

50%

30%

20%

0%

Senegal

5

1,839

5.37%

15%

27%

0%

57%

20%

20%

0%

60%

Serbia

1

1,973

2.19%

0%

0%

0%

100%

0%

0%

0%

100%

Sierra Leone

1

48

0.39%

0%

0%

0%

100%

0%

0%

0%

100%

Singapore

3

4,297

0.95%

0%

52%

0%

48%

0%

33%

0%

67%

SlovakRepublic

3

4,398

2.93%

0%

0%

0%

100%

0%

0%

0%

100%

36

© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Slovenia

3

257

0.42%

0%

0%

0%

100%

0%

0%

0%

100%

South Africa

11

10,310

1.46%

13%

6%

56%

25%

27%

9%

9%

55%

Spain

128

50,298

3.26%

1%

3%

37%

59%

2%

9%

24%

65%

Sri Lanka

1

518

0.22%

0%

100%

0%

0%

0%

100%

0%

0%

Sudan

1

366

0.23%

100%

0%

0%

0%

100%

0%

0%

0%

Suriname

1

63

0.71%

0%

0%

0%

100%

0%

0%

0%

100%

Sweden

1

317

0.07%

0%

0%

100%

0%

0%

0%

100%

0%

Taiwan12

16,679

1.55%

0%

12%

86%

2%

0%

33%

58%

8%

Tanzania

1

410

0.32%

100%

0%

0%

0%

100%

0%

0%

0%

Thailand

7

4,242

0.40%

0%

3%

58%

39%

0%

14%

29%

57%

Tunisia

1

1,730

1.38%

100%

0%

0%

0%

100%

0%

0%

0%

Turkey37

48,657

3.34%

47%

16%

8%

29%

32%

27%

22%

19%

Turkmenistan

3

349

0.42%

35%

12%

53%

0%

33%

33%

33%

0%

Ukraine

3

1,898

0.51%

6%

0%

11%

83%

33%

0%

33%

33%

United ArabEmirates

8

21,140

3.44%

57%

2%

41%

0%

38%

25%

38%

0%

UnitedKingdom

95

111,815

4.36%

35%

8%

46%

12%

22%

7%

31%

40%

United States

66

65,370

0.38%

8%

16%

5%

71%

8%

15%

5%

73%

Uruguay

3

316

0.44%

53%

17%

30%

0%

33%

33%

33%

0%

Uzbekistan

1

148

0.09%

100%

0%

0%

0%

100%

0%

0%

0%

Venezuela

2

1,325

0.24%

0%

0%

100%

0%

0%

0%

100%

0%

Viet Nam

9

3,229

0.63%

0%

64%

3%

33%

0%

56%

11%

33%

Yemen

2

245

0.24%

0%

0%

0%

100%

0%

0%

0%

100%

Zambia

1

n/a

0.00%

n/a

n/a

n/a

n/a

0%

0%

100%

0%

Zimbabwe

1

263

0.96%

0%

0%

100%

0%

0%

0%

100%

0%

*Note by Turkey: The information in this document with reference to “Cyprus“ relates to the southern part of theIsland. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Turkey
recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within
the context of the United Nations, Turkey shall preserve its position concerning the “Cyprus issue”.
Note by all the European Union Member States of the OECD and the European Union: The Republic of Cyprus isrecognised by all members of the United Nations with the exception of Turkey. The information in this document
relates to the area under the effective control of the Government of the Republic of Cyprus.
Note: Project data is available for 31 OECD countries and 80 non-OECD countries. Only projects reaching financial
closure are included and the date refers to the financial close date. Refinancing deals are not included. Data do notcover infrastructure service contracts (e.g. management and lease contracts). Transactions are reported in
USD million in the database (transactions not denominated in USD are converted to USD at the loan agreement
signing date by Dealogic), and converted to constant 2014 international dollars using purchasing power parities
and the growth of GDP in constant local currency units from the World Bank Development Indicators database,complemented by the IMF’s World Economic Outlook database when not available. Transport infrastructure sectors
refers to Dealogic’s classification: airport; bridge, road and tunnel (roads); rail infrastructure and urban
railway/LRT/MRT (railroads); and ports. Projects are assumed to be private, although they may involve public
investment.
Source: Dealogic (n.d.).

© OECD/ITF 2019

37

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | WORKING GROUP PAPER | ITF

Appendix 3. 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. (forthcoming), “The Role of
Improve project selection? Close the infrastructure funding Private Investment in Transport
gap? Have other positive effects when it is private?
Infrastructure”, 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. (forthcoming), “Uncertainty inLong-term Service Contracts: Franchising
Rail Transport 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.

38© OECD/ITF 2019

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | 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?

Vasallo, J. (forthcoming), “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?

© OECD/ITF 2019

Makovšek, D. and D. Veryard (2016), “TheRegulatory Asset Base and Project Finance
Models”, International Transport Forum
Discussion Papers, No. 2016/01, Paris.
39

QUANTIFYING PRIVATE AND FOREIGN INVESTMENT IN TRANSPORT INFRASTRUCTURE | 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 Elliot, D. (forthcoming),“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 et al. (forthcoming), “Capex Bias
the capex bias be managed?
and 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

40© OECD/ITF 2019

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
CostlyCorporate Partnership
Board

Quantifying Private andForeign Investment inTransport Infrastructure

Corporate Partnership
Board

4

2

This report quantifies private andforeign investment in transport
infrastructure by sub-sectors in alarge range of countries. It covers
investments in airports, ports,
railroads and roads – in 108
economies from 1995 to 2016.
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

Corporate Partnership
Board

Corporate Partnership
Board

8

Corporate Partnership
Board

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?

Corporate Partnership
Board

Corporate Partnership
Board

Corporate Partnership
Board

16

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

Corporate Partnership
Board

Corporate Partnership
Board

Corporate Partnership
Board

22

20

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

Corporate Partnership
Board

Corporate Partnership
Board

Corporate Partnership
Board

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

Corporate Partnership
Board

Corporate Partnership
Board

32

1

6

CPB

14

International Transport Forum
2 rue André Pascal
F-75775 Paris Cedex 16+33 (0)1 73 31 25 00
contact@itf-oecd.org
www.itf-oecd.org

Corporate Partnership
Board

Corporate Partnership
Board

34

36