Thorsten Beckers () (Workgroup for Infrastructure Policy (WIP), Technische Universität Berlin) Christian von Hirschhausen () (Chair of Energy Economics and Public Sector Management, Technische Universität Dresden) Jan Peter Klatt () (Workgroup for Infrastructure Policy (WIP), Technische Universität Berlin)
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This article analyzes the efficiency impacts of PPP-projects in the highway sector. The economic analysis concludes that the PPP-approach should primarily be considered as an alternative procurement strategy. PPP can be suitable for the new built, extension and renewal of certain highway stretches to reduce costs, whereas the application of the PPP approach for entire networks seems to go along with cost increases. For achieving the potential cost reductions in PPPs for stretches, risks should be allocated in an efficient way between the involved parties, and tendering procedures should be competitive. Apart from that, well-elaborated contracts as well as credible and stable public institutions in charge of preparing, tendering and monitoring the projects are necessary to ensure the success of PPPs. It is also found that concession models which combine the PPP-approach with a remuneration of the concessionaire based on user payments are not an appropriate instrument to solve financial problems in the highway network; they should only be considered in exceptional cases for stretches with little traffic deviation in the case of tolling. The lack of funding in the German federal trunk road sector should rather be addressed by the implementation of a road fund which should receive earmarked user charges. A further result is that the current PPP-models in Germany (A-Model, F-Model, and Functional Construction Contract) feature some design deficits and need to be adapted in order to achieve the goal of increased cost efficiency.
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Paper provided by Center for Network Industries and Infrastructure (CNI) in its series Working Papers with number
2006-03.
Length: 40 pages Date of creation: Date of revision:
19 Jun 2006 Publication status: Published in Zeitschrift für Verkehrswissenschaft (ZfV), Vol. 77 Issue 2, S.105-142 Handle: RePEc:cni:wpaper:2006-03
Find related papers by JEL classification: D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights H40 - Public Economics - - Publicly Provided Goods - - - General L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
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