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Public-Private Partnerships In Transport

There is no standard definition of Public - Private Partnerships (PPPs) but there are some typical characteristics. These centre on formal contracting between the public and private sectors for transport infrastructure development, maintenance or service delivery; appropriate allocation of risk sharing; and the use of private sector management skills and finance. The main objectives are to gain efficiency, improve accountability, mobilise additional resources and extend access. While it is now recognised that in many countries the public sector will remain the main owner and service supplier, PPPs are seen as part of a range of options that need to be examined to support local poverty reduction strategies, both directly and through economic growth.

As outlined in the World Bank Group Transport Business Strategy, 2008 - 2012 there is a wide and flexible range of PPP business models, covering management contracts, leasing, franchises and concessions through to full privatisation. Such PPPs can also cover construction, rehabilitation, operation and financing of transport for existing or new facilities. The Private Participation in Infrastructure database, tracks expected total public and private investment at financial closure, by sector and region. It is based on available public information and therefore has limited coverage of small-scale projects. In 2006, some 108 transport projects with private participation valued at $ 26 billion in 30 low and middle income countries, were reported as being closed; a record that surpassed the previous 1997 peak. There are no comparable public sector only investment statistics available. The most common type of PPP observed were concessions for existing assets and greenfield projects. The growth in PPPs is led by roads and bridges, particularly in large, middle income or high growth countries like China, India, Brazil, RSA and Mexico; in most of the 150 or so developing and transition economies, new private finance for transport infrastructure remains very limited. Interestingly, countries like India and China are also becoming major PPP transport infrastructure exporters and financiers in their own right.

Read more in the gTKP Finance & Economics Topic Information Sheet on Public-Private Partnerships In Transport.

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