The experience of the Skye Bridge project is reviewed in detail. Bridging in private finance together with the previous government imposed obstacles to the use of private finance, namely the so-called Ryrie rules. The attractions to the private sector of promoting infrastructure projects are discussed.
Promoters face significant risks from initiating projects and, in particular, sunk costs.
The requirement for open tender on major Government contracts means that pre-tender costs are not easily recovered. The empirical research on the Skye Bridge project looks at the tendering and subsequent funding arrangements used by the successful consortium. A review of the financing arrangements and the resultant risk and reward for participants is undertaken. Only projects offering the highest rate of return are likely to attract potential interest. Consequently, government legislation may not have the desired effect of increasing the amount of privately funded infrastructures.