IDEAS home Printed from https://ideas.repec.org/a/spr/inrvec/v71y2024i4d10.1007_s12232-024-00473-8.html
   My bibliography  Save this article

Measuring the value of public–private partnership

Author

Listed:
  • Josef Jilek

    (Škoda Auto University)

Abstract

There is a value of public–private partnership (PPP) for investors. The question is how to measure this value. There is significant financing component in any PPP because the grantor provides the operator (and consequently the investors) with a significant benefit of financing the construction. When measuring the value of financing the discount rate corresponding to separate financing transaction between operator and grantor at PPP inception. The payments for construction by grantor to operator and subsequently to investors can be decomposed into three components: (i) payments to construction company; (ii) accrued interest on debt of grantor; and (iii) lump sum PPP value for operator and subsequently for investors.

Suggested Citation

  • Josef Jilek, 2024. "Measuring the value of public–private partnership," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 71(4), pages 917-932, December.
    • Handle: RePEc:spr:inrvec:v:71:y:2024:i:4:d:10.1007_s12232-024-00473-8
    DOI: 10.1007/s12232-024-00473-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12232-024-00473-8
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s12232-024-00473-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Allyson M. Pollock & David Price & Stewart Player, 2007. "An Examination of the UK Treasury's Evidence Base for Cost and Time Overrun Data in UK Value-for-Money Policy and Appraisal," Public Money & Management, Taylor & Francis Journals, vol. 27(2), pages 127-134, April.
    2. Sounman Hong, 2016. "When does a public–private partnership (PPP) lead to inefficient cost management? Evidence from South Korea’s urban rail system," Public Money & Management, Taylor & Francis Journals, vol. 36(6), pages 447-454, September.
    3. Colla, Paolo & Hellowell, Mark & Vecchi, Veronica & Gatti, Stefano, 2015. "Determinants of the cost of capital for privately financed hospital projects in the UK," Health Policy, Elsevier, vol. 119(11), pages 1442-1449.
    4. Anne Stafford & Basilio Acerete & Pam Stapleton, 2010. "Making concessions: Political, commercial and regulatory tensions in accounting for European roads PPPs," Accounting and Business Research, Taylor & Francis Journals, vol. 40(5), pages 473-493.
    5. Elisabetta IOSSA & Stephane SAUSSIER, 2018. "Public Private Partnerships In Europe For Building And Managing Public Infrastructures: An Economic Perspective," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(1), pages 25-48, March.
    6. R. G. Walker, 2003. "Public-Private Partnerships: Form Over Substance?," Australian Accounting Review, CPA Australia, vol. 13(30), pages 54-59, July.
    7. Benito, Bernardino & Montesinos, Vicente & Bastida, Francisco, 2008. "An example of creative accounting in public sector: The private financing of infrastructures in Spain," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 19(7), pages 963-986.
    8. Cian O'SHEA & Dónal PALCIC & Eoin REEVES, 2019. "Comparing Ppp With Traditional Procurement: The Case Of Schools Procurement In Ireland," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(2), pages 245-267, June.
    9. Katja Funke & Tim Irwin & Isabel Rial, 2013. "Budgeting and Reporting for Public-Private Partnerships," International Transport Forum Discussion Papers 2013/7, OECD Publishing.
    10. Jean Shaoul & Anne Stafford & Pam Stapleton, 2012. "The Fantasy World of Private Finance for Transport via Public Private Partnerships," International Transport Forum Discussion Papers 2012/6, OECD Publishing.
    11. repec:bla:pmomgt:v:27:y:2007:i:2:p:127-134 is not listed on IDEAS
    12. repec:bla:annpce:v:89:y:2018:i:1:p:25-48 is not listed on IDEAS
    13. Michael Opara & Fathi Elloumi & Oliver Okafor & Hussein Warsame, 2017. "Effects of the institutional environment on public-private partnership (P3) projects: Evidence from Canada," Accounting Forum, Taylor & Francis Journals, vol. 41(2), pages 77-95, June.
    14. Robert Jupe, 2009. "New Labour, Public–Private Partnerships And Rail Transport Policy," Economic Affairs, Wiley Blackwell, vol. 29(1), pages 20-25, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Peda, Peeter & Vinnari, Eija, 2020. "The discursive legitimation of profit in public-private service delivery," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 69(C).
    2. Graeme A. Hodge, 2010. "Reviewing Public–Private Partnerships: Some Thoughts on Evaluation," Chapters, in: Graeme A. Hodge & Carsten Greve & Anthony E. Boardman (ed.), International Handbook on Public–Private Partnerships, chapter 5, Edward Elgar Publishing.
    3. Cepparulo, Alessandra & Eusepi, Giuseppe & Giuriato, Luisa, 2020. "Public finances and Public Private Partnerships in the European Union," MPRA Paper 103918, University Library of Munich, Germany.
    4. Mai, The Vinh & Casady, Carter B., 2023. "Delivering transport infrastructure using state-owned enterprises (SOEs): A business history of Vietnam Expressway Corporation between 2004 and 2016," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 339-350.
    5. Alessandra Cepparulo & Giuseppe Eusepi & Luisa Giuriato, 2024. "Public Finance, Fiscal Rules and Public–Private Partnerships: Lessons for Post-COVID-19 Investment Plans," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 66(1), pages 191-213, March.
    6. Martijn van den Hurk & Marlies Hueskes, 2017. "Beyond the financial logic: Realizing valuable outcomes in public–private partnerships in Flanders and Ontario," Environment and Planning C, , vol. 35(5), pages 784-808, August.
    7. Emily Poole & Carl Toohey & Peter Harris, 2014. "Public Infrastructure: A Framework for Decision-making," RBA Annual Conference Volume (Discontinued), in: Alexandra Heath & Matthew Read (ed.),Financial Flows and Infrastructure Financing, Reserve Bank of Australia.
    8. Acerete, Basilio & Stafford, Anne & Stapleton, Pamela, 2011. "Spanish healthcare public private partnerships: The ‘Alzira model’," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 22(6), pages 533-549.
    9. Alexander D. Andryakov, 2018. "International Experience and Russian Practice," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 6, pages 59-70, December.
    10. Anne Stafford & Basilio Acerete & Pam Stapleton, 2010. "Making concessions: Political, commercial and regulatory tensions in accounting for European roads PPPs," Accounting and Business Research, Taylor & Francis Journals, vol. 40(5), pages 473-493.
    11. Yujia He & Lei Shi & Zhongfu Li, 2021. "The combined effect of marginal social and private benefit on the socially optimal equity structure of PPP projects," Construction Management and Economics, Taylor & Francis Journals, vol. 39(10), pages 807-823, October.
    12. Chung, Demi & Hensher, David A. & Rose, John M., 2010. "Toward the betterment of risk allocation: Investigating risk perceptions of Australian stakeholder groups to public-private-partnership tollroad projects," Research in Transportation Economics, Elsevier, vol. 30(1), pages 43-58.
    13. Rodrigues, Artur, 2025. "Investment and leverage decisions under caps and floors," International Review of Financial Analysis, Elsevier, vol. 97(C).
    14. Susan Newberry, 2004. "Trade in Services: Wider Implications for Accounting Standard-Setters and Accountants," Australian Accounting Review, CPA Australia, vol. 14(33), pages 11-21, July.
    15. Debra Bloch & Falilou Fall, 2016. "Government Debt Indicators:Understanding the Data," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 7(01), pages 1-28, February.
    16. Hui Jin & Isabel Rial, 2016. "Regulating Local Government Financing Vehicles and Public-Private Partnerships in China," IMF Working Papers 2016/187, International Monetary Fund.
    17. repec:ces:ifodic:v:12:y:2014:i:3:p:19126469 is not listed on IDEAS
    18. Gani Aldashev & Esteban Jaimovich & Thierry Verdier, 2023. "The Dark Side of Transparency: Mission Variety and Industry Equilibrium in Decentralised Public Good Provision," The Economic Journal, Royal Economic Society, vol. 133(654), pages 2085-2109.
    19. Tanya Mokdad & Timothy Irwin, 2010. "Managing Contingent Liabilities in Public-Private Partnerships," World Bank Publications - Reports 23187, The World Bank Group.
    20. Chang, Zheng & Phang, Sock-Yong, 2017. "Urban rail transit PPPs: Lessons from East Asian cities," Transportation Research Part A: Policy and Practice, Elsevier, vol. 105(C), pages 106-122.
    21. Cian O'SHEA & Dónal PALCIC & Eoin REEVES, 2019. "Comparing Ppp With Traditional Procurement: The Case Of Schools Procurement In Ireland," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(2), pages 245-267, June.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:inrvec:v:71:y:2024:i:4:d:10.1007_s12232-024-00473-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.