General Knowledge
Halperin, Ricardo ; Malone, Patrick ;
The World Bank
Published in
Submitted by
Olim Latipov
Related theme(s)
Finances & Economics
All Regions

Overview of world experience in private financing in the road sector

The study reviews private financing in the road sector, which has traditionally been financed directly by governments. However, there are reasons why the private sector could be involved in the subject, namely regarding the efficiency of operations, and, the provision of responsive service to road users, shippers, and all those whose livelihoods are affected by the road system. Moreover, the totality of the road system, also includes financing of new construction, and existing network requiring maintenance and rehabilitation. Government concessions are reviewed, starting with private toll roads' operations, to a number of motorways development, conducive to improved economic conditions, which allows high traffic growth. Broad policy issues are examined, and the factors contributing to these changes. The study suggests concessions should be structured, and supportive policy, and legal frameworks, within national, regional, and local transportation policies, and programs implemented. The financial support from governments is analyzed, through a range of mechanisms, such as equity guarantees, exchange rate guarantees, and minimum traffic or revenue guarantees. Following several case studies, it concludes that, although private sector involvement is sound in theory, in practice doubts still exist, particularly in political terms, but its efficiency remains constant.