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Private Financing of Transport Infrastructure: An Assessment of the UK Experience

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  • Olivier Debande

Abstract

This paper investigates the consequence of the private sector's involvement in the realisation of transport infrastructure projects, since 1992, when the UK government launched the Private Finance Initiative (PFI). This new form of providing infrastructure services is based on a concession scheme by which the public authority transfers the design, construction, operation, and financing of the infrastructure to a private concessionaire. The private sector participation transforms the role of the public sector from being an owner of capital assets and direct provider of services into a purchaser of services through a long-term agreement. The PFI scheme is expected to generate different benefits. The magnitude of these benefits is expected to compensate the additional costs of having recourse to the private sector. © The London School of Economics and the University of Bath 2002

Suggested Citation

  • Olivier Debande, 2002. "Private Financing of Transport Infrastructure: An Assessment of the UK Experience," Journal of Transport Economics and Policy, University of Bath, vol. 36(3), pages 355-387, September.
  • Handle: RePEc:tpe:jtecpo:v:36:y:2002:i:3:p:355-387
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    Cited by:

    1. Miranda Sarmento, J. & Renneboog, L.D.R., 2014. "Public-Private Partnerships : Risk Allocation and Value for Money," Discussion Paper 2014-017, Tilburg University, Tilburg Law and Economic Center.
    2. Olsson, Jerry, 2006. "Decentralization of Governance and Financing of Public Roads in the Philippines in the 1990s," Philippine Journal of Development PJD 2004 Vol. XXXI No. 2-, Philippine Institute for Development Studies.
    3. Laurino, Antonio & Beria, Paolo & Grimaldi, Raffaele, 2010. "Financing transport infrastrucure projects in Italy: a critical analysis of the main approaches," MPRA Paper 29140, University Library of Munich, Germany.
    4. Valila, Timo, 2005. "How expensive are cost savings? On the economics of public-private partnerships," EIB Papers 4/2005, European Investment Bank, Economics Department.
    5. Miranda Sarmento, J. & Renneboog, L.D.R., 2014. "Anatomy of Public-Private Partnerships : Their Creation, Financing, and Renegotiations," Discussion Paper 2014-017, Tilburg University, Center for Economic Research.
    6. Weiß, Hans-Jörg, 2005. "Die Probleme des ÖPNV aus netzökonomischer Sicht," Discussion Papers 110, University of Freiburg, Institute for Transport Economics and Regional Policy.
    7. 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.
    8. David A. Hensher & Demi Chung, 2011. "Road Infrastructure and Institutional Reform: Tolling and Pricing," Chapters,in: International Handbook of Network Industries, chapter 15 Edward Elgar Publishing.
    9. Athena Roumboutsos & Stéphane Saussier, 2014. "Public-private partnerships and investments in innovation: the influence of the contractual arrangement," Construction Management and Economics, Taylor & Francis Journals, vol. 32(4), pages 349-361, April.
    10. Rangel, Thais & Vassallo, José Manuel & Arenas, Blanca, 2012. "Effectiveness of safety-based incentives in Public Private Partnerships: Evidence from the case of Spain," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(8), pages 1166-1176.
    11. Gorman, Michael F., 2008. "Evaluating the public investment mix in US freight transportation infrastructure," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(1), pages 1-14, January.
    12. Athena Roumboutsos, 2010. "Sustainability, Social Discount Rates and the Selection of Project Procurement Method," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 16(2), pages 165-174, May.
    13. Weiß, Hans-Jörg, 2007. "Problemfelder staatlicher Infrastrukturpolitik nach einer Marktöffnung: Eine wettbewerbsökonomische Perspektive," Forschungs- und Sitzungsberichte der ARL: Aufsätze,in: Wandel der Stromversorgung und räumliche Politik, pages 68-82 Akademie für Raumforschung und Landesplanung (ARL) - Leibniz-Forum für Raumwissenschaften.
    14. Byoun, Soku & Xu, Zhaoxia, 2014. "Contracts, governance, and country risk in project finance: Theory and evidence," Journal of Corporate Finance, Elsevier, vol. 26(C), pages 124-144.
    15. Demi Chung & David A. Hensher, 2015. "Modelling Risk Perceptions of Stakeholders in Public–Private Partnership Toll Road Contracts," Abacus, Accounting Foundation, University of Sydney, vol. 51(3), pages 437-483, September.
    16. repec:kap:iaecre:v:16:y:2010:i:2:p:165-174 is not listed on IDEAS
    17. Athias, Laure & Wicht, Pascal, 2014. "Cultural Biases in Public Service Delivery: Evidence from a Regression Discontinuity Approach," MPRA Paper 60639, University Library of Munich, Germany.
    18. Antonio Sánchez Soliño, 2012. "Optimización de la transferencia de riesgos en los Contratos de Infraestructuras y Servicios Públicos," Hacienda Pública Española, IEF, vol. 201(2), pages 67-91, June.

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