Private Investment in Infrastructure: Dealing with uncertainty in contracts
Summary and Conclusions
This report examines how decision makers in the public and private sector can better manage the uncertainty inherent in contracts for privately-financed infrastructure and procurement more generally. It presents the findings of 33 experts from 13 countries, convened in a working group by the International Transport Forum. Detailed analyses of specific questions are available in 17 working group papers that complement this synthesis.
The current debate about infrastructure revolves around how to mobilise more private investment to help build new or renew existing assets. Reducing uncertainty for investors is seen as one way to encourage more private infrastructure financing. However, uncertainty about risk affects every party in infrastructure procurement and management - especially suppliers, who deliver most of the value. Would Public-Private Partnerships (PPPs), and infrastructure contracts in general, perform better if the public sector creates more information about risk - and makes this information available to bidders? Are there better approaches than PPPs to deal with uncertainty over the long run? The conference presented the findings of a new report, “Private Investment in Transport Infrastructure: Dealing with Uncertainty in Contracts”, and discussed these with academics, practitioners and policy makers from around the world. The report is the main output of an ITF Working Group of more than 20 experts from different disciplines related to infrastructure investment, procurement, civil engineering, and economic regulation.
- What is Private Investment in Transport Infrastructure and Why is it Difficult?
- The Role of Private Investment in Transport Infrastructure
- Quantifying Private and Foreign Investment in Transport Infrastructure
- Risk Allocation in Public-Private Partnerships and the Regulatory Asset Base Model (forthcoming)
- Uncertainty in Long-term Service Contracts: Franchising Rail Transport Operations
- Competition for Infrastructure Projects: Traditional Procurement and PPPs in Europe (forthcoming)
- Collaborative Infrastructure Procurement in Sweden and the Netherlands (forthcoming)
- Risk Allocation in Mega-Projects in Denmark
- Risk Pricing in Infrastructure Delivery: Making Procurement Less Costly
- The Danish State Guarantee Model for Infrastructure Investment
- Public-Private Partnerships in Transport: Unbundling Prices from User Charges
- Dealing with the Obsolescence of Transport Infrastructure in Public-Private Partnerships (forthcoming)
- A Corporatised Delivery Model for the Australian Road Network (forthcoming)
- Infrastructure Funding: Does it Matter Where the Money Comes From?
- Capex Bias and Adverse Incentives in Incentive Regulation: Issues and Solutions
- The Thames Tideway Tunnel: A Hybrid Approach to Infrastructure Delivery
- Mobilising Private Investment in Infrastructure: Investment De-Risking and Uncertainty
Papers written in preparation for the Working Group:
- The Regulatory Asset Base and Project Finance Models
- Risk pricing inefficiency in public–private partnerships