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Private Investment in Transport Infrastructure: Dealing with Uncertainty in Contracts

Research Report, 22 June 2018

  • Pursue private investment in infrastructure on the merits of improved efficiency.
  • Invest more into upfront preparation of projects to reduce inefficient risk pricing by suppliers.
  • Undertake a comprehensive analysis of how to assist suppliers.
  • The pursuit of certainty in delivery should be balanced against cost.
  • Stimulate innovation through early contractor involvement or alliancing, not public-private partnerships.
  • Avoid transferring demand risk to public-private partnerships if service levels do not strongly impact demand.
  • Bundle and cross-fund public-private partnerships to reduce demand risk.
  • Adopt the regulatory asset base model where competition is absent or demand not strongly endogenous.
  • Introduce a transparent public accounting standard to maximise the value for money of private investment.
  • Foster competitive markets to achieve cost-effective infrastructure.
  • Pursue data collection on how contract design affects project outcomes.
  • Support the development of an evidence-supported procurement tool.

 

All Transport, Infrastructure, Investment, Pricing, Taxation, Road