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Last data update: November, 2009
Other Resources
Over the last fifteen years, governments around the world pursued policies to involve
the private sector in the delivery and financing of infrastructure services. Private
participation in infrastructure (PPI) and reforms were driven by the high costs
and poor performance of state-owned network utilities. The scale of this move away
from the dominant public sector model was far more rapid than had been anticipated
at the start of the 1990s with investment flows peaked at US$114 billion in 1997.
But they sharply fall after that, and recently recovered.
The following resources aim at providing the broader context in which the data collected
by the PPI Project database have taken place. The resources include toolkits to
design PPI schemes, websites that contains papers discussing PPI issues or transaction
information, and selected reading lists of papers dealing with private participation
in the different infrastructure sectors, and reviewing country or project level
experiences.
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Transportation Papers
This reading list includes papers reviewing experiences with private participation in transport (airports, railways, roads, and seaports) and the impact on service provision.
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New concession model for toll road development in Mexico
Author:
General Directorate of Road Development
Source:
Secretaria de Comunicaciones y Transport, Mexico. DF, September 2007
The presentation summarizes the key features of the new concession model for toll roads in Mexico, and describes the projects that have been concessioned.
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Public private partnerships for highways in Mexico
Author:
General Directorate of Road Development
Source:
Secretaria de Comunicaciones y Transport, Mexico. DF, September 2007
The presentation summarizes the key features of the public private partnership program for highways in Mexico, and describes the projects that have been awarded under this scheme. In Mexico, PPP projects are usually those which are expected to receive government payments such as availability payments and shadow tolls.
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Port reform in Nigeria: Upstream policy reforms kick-start one of the world’s largest concession programs
Author:
James Leigland and Gylfi Palsson
Source:
Gridlines No. 17, Public-Private Infrastructure Advisory Facility (PPIAF), March 2007
Over a two-year period, beginning in late 2004, the Nigerian federal government implemented one of the most ambitious port concessioning programs ever attempted. The success of this program resulted from the government’s vision and decisiveness, as well as the need to remedy massive shortcomings in the sector, which were sharply inhibiting economic development. But the program also benefited strongly from policy reform recommendations made by PPIAF-funded consultants in 2002. The role of these “upstream” policy and planning recommendations highlights the value of best practice steps for creating an enabling environment in which sustainable arrangements for the private participation in infrastructure can be concluded.
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Financing transportation infrastructure—Potential fiscal risks of innovative financing mechanisms
Author:
Gerd Schwartz, Ana Corbacho, and Taline Koranchelian International Monetary Fund
Source:
Paper to be presented at the “First International Conference on Funding Transportation Infrastructure,” Banff, Alberta (Canada), August 2–3, 2006.
This paper looks at fiscal aspects related to new financing mechanisms, focusing on potential fiscal risks. Specifically, it discusses different fiscal risk aspects arising from two institutional arrangements—Road Funds and PPPs—and options for containing these. The paper concludes that Road Funds and PPPs may be useful to increase infrastructure investments if structured and managed properly to mitigate fiscal risks. PPPs are valuable ways to increase infrastructure investment when undertaken to increase efficiency and capitalize on private sector expertise. To be valuable, PPPs should be undertaken with the goal of increasing efficiency by attracting private capital to infrastructure investment and should not be pursued to move investment spending off budget. Furthermore, governments need to assess carefully risks associated with PPPs, and ensure that these risks are appropriately shared with the private sector, with the risk borne by the government adequately reflected in the fiscal accounts.
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Sub-Saharan Africa - Review of selected railway concessions
Author:
Africa transport sector, The World Bank
Source:
Report No. 36491, the World Bank, June 2006
This report is in response to questions regarding perceived unrestrained monopolistic behavior by private sector operators in the port and rail sectors in Sub Saharan Africa (SSA). Indeed, prima facie, and for historical reasons, much of SSA's transport network is organized in multiple port/railway corridors that appear to favor potential monopolistic behavior. During the course of the analysis, it became evident that other equally important issues related to financial performance and attractiveness of concessions design needed to be addressed. Since the quantity and availability of data was found to be limited for port concessions, it was decided early in the process to concentrate the analysis on existing planned railway concessions.
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Launching Public Private Partnerships for Highways in Transition Economies
Author:
Cesar Queiroz
Source:
Transport papers T9, the World Bank, September 2005
In many countries the private sector has been involved in financing infrastructure through concessions under a public-private partnership (PPP) program. PPP schemes, however, are somewhat underutilized in transition economies, where the potential financing gaps are significant and growing, and there seems to be an enormous potential for more private sector involvement in the financing and operation of highway assets in these countries. This paper reviews potential applications of partial risk guarantees, the required legal framework (for example, concession law) for attracting private capital for PPP schemes, possible steps for a country to launch a program of private participation in highways, the concept of greenfield and road maintenance concession programs, and the treatment of unsolicited proposals
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Results of Railway Privatization in Africa
Author:
Richard Bullock
Source:
Transport papers T8, the World Bank, September 2005
This paper reviews the performance of concessioned railways in Sub-Saharan Africa. Since 1993 thirteen railways were concession in the region and with another seven in progress by 2005. The study concludes that African railways that have been concessioned operate more efficiently and more competitive. In those concessions, investments have been largely funded by multilateral and bilateral loans at concessional rates. Although concessions have revitalized many railways systems in Africa , they may not ensure long-term survival without further injections of public investments.
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Results of Railway Privatization in Latin America
Author:
Richard Sharp
Source:
Transport papers T6, the World Bank, September 2005.
This paper reviews the performance of railways concession in Latin America . Over a decade since rail concessioning began in the region, the overall assessment of its results is positive, particularly for freight railways. Measure of productive efficiency show post-concession improvements in cargo while effects on tariffs and service levels has been positive. Evidence is less extensive in passenger services. A main objective of these concessions, relieve the public debt burden that over-staffed and under-performing public railways imposes, was achieved perhaps too well. While private sector investment increased, public sector investment plummeted. Consequently investment in surface transport infrastructure in the region is far below levels in the 1980s. Underinvestment in such infrastructure and the need to greater public sector participation is becoming an increasing concern in the region.
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Reform, Commercialization and Private Sector Participation in Railways in Eastern Europe and Central Asia
Author:
Paul Amos
Source:
Transport papers T4, the World Bank, January 2005.
This paper reviews reform progress in the railway sector in the Eastern Europe and Central Asia (ECA) region. It primarily focuses on Estonia , Croatia , Kazakhstan , Poland , Romania , and Russian Federation . The reforms lessons that emerged from this region are similar to the ones l earned in other developing regions: reforming a complex industry is a long term process, structural change is a mean to an end, structural separation of railway infrastructure from railway operations cannot of itself improve business performance, one of structural model is unlikely to fit all operations, ownership does matter, railway reform does not necessarily mean stand-alone profitability, and market themselves will not stand still.
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A Tale of Three Cities: Urban Rail Concessions in Bangkok, Kuala Lumpur and Manila
Author:
Halcrow Group Limited
Source:
Background paper for the ADB-JBIC-World Bank East Asia and Pacific Infrastructure Flagship Study, December 2004.
This study focuses the role of private concessions in developing urban mass rapid transit (MRT) systems in East Asian cities. It is primarily founded on the experiences of Kuala Lumpur , Bangkok and Manila and the comparator cities of London , Singapore and Hong Kong.
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Privatizing British railways: Are there lessons for the World Bank and Its borrowers?
Author:
Louis S. Thompson
Source:
Transport Papers TP-2, Transport Sector Board, World Bank Group, September 2004.
This paper was written to see what lessons Britain’s experience of rail privatization might have for the Bank’s client countries. The lessons that can be drawn from the U.K. experience are the following. The approach was overly complex, involving radical reforms both in structure (vertical separation) and ownership (privatization): moreover, both reforms were undertaken simultaneously and within an unusually compressed period of time. Vertical separation can be made to work, and is not unsafe: it is, however, expensive and poses difficulty in reconciling the incentives of all parties. It remains to be seen whether the benefits are worth the costs. Privatization had some results that exceeded expectations (the operating passenger franchises and rolling stock ownership and leasing companies) and some (infrastructure provision) that fell well short. The transition from public to private and from integrated to separated was rough, and suffered from the haste of the process.
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Toll-road concession: The Chilean experience
Author:
Cruz Lorenzen, María Elena Barrientos, and Suman Babear
Source:
PFG Discussion paper series, No. 124, World Bank.
This study reviews the Chilean experience of involving private firms in upgrading about 2,000 kilometers of expressways - with an overall investment in excess of US$3 billion. The report focuses on the regulatory framework established, the bidding process used, and the distribution of risks in the financial schemes adopted by private concessionaires. The findings provide lessons that are relevant for policymakers and private investors alike.
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Port Concessions in Chile: Contract Design to Promote Competition and Investment
Author:
Juan Foxley and Jose Luis Mardones
Source:
Public Policy Journal No. 223, the World Bank, October 2000.
The objective of Chile 's port reform is to encourage investment in better port equipment, in the hope that this will lead to more efficient service, in part by attracting larger, more modern ships. The first four major concessions, under which integrated terminals are run exclusively by private companies, started operations in January 2000. The integrated approach to port services replaces a system of free entry of multiple stevedoring companies. This Note reviews how the concessions were designed: the criteria for the winning bids, the rules to prevent concessionaires' abusing their monopoly power, the rules to encourage investment, and the provisions for redundant workers.
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Multiservice Infrastructure: Privatizing Port Services
Author:
Lourdes Trujillo and Gustavo Nombela
Source:
Public Policy Journal No. 222, the World Bank, October 2000.
Ports have become increasingly capital intensive. Economies of scale have led to larger, more specialized ships. And competition between ports has started to grow. As a result, governments are reorganizing the way ports are run and permitting more private ownership and service delivery. Because ports provide multiple services, if governments are to design an efficient legal and regulatory framework for private participation it is important to study all these activities to evaluate the best approach. Moreover, because these activities must take place in a small space, it is important to study how they are best coordinated.
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Rail and Subway Concessions in Rio de Janeiro: Designing Contracts and Bidding Processes
Author:
Jorge M. Rebelo
Source:
Public Policy Journal No. 186, the World Bank, June 1999.
In early 1995 the Rio de Janeiro state government began reforms aimed at selling or concessioning to the private sector loss-making state-owned enterprises. This Note describes the concessioning of Rio 's subway, the Metro, in December 1997 and its commuter rail service, Flumitrens, in July 1998. The reforms were expected to eliminate subsidies for the Metro and reduce them by two-thirds for Flumitrens, to improve service, and to clear the backlog of maintenance and investment.
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Global Trend to Railway Concessions Delivering Positive Results
Author:
Louis S. Thompson and Karim-Jacques Budin
Source:
Public Policy Journal No. 134, the World Bank, December 1997.
The authors review a number of recent innovative rail concessions. Each country has approached its problems differently, and each provides different insights into what can be achieved with concessions. But all the cases show that restructuring and substantial government investment in the design of a concession pay off. Concessionaires can do exactly what is expected-increase traffic, improve service, and enhance labor and asset efficiency - if they are allowed to do so.
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A Retrospective on the Mexican Toll Road Program (1989-94)
Author:
Jeff Ruster
Source:
Public Policy Journal No. 125, the World Bank, September 1997.
In 1989, Mexico initiated a private toll road program of fifty-three concessions involving an investment of about US$13 billion in limited recourse financing over the period 1989-94. The program more than doubled the size of the national toll road network, but miscalculations of investment costs and overoptimistic forecasts of operating income undermined the viability of the toll roads. An already bad situation was made worse by the Mexican currency crisis of December 1994, and the private toll road initiative came to a virtual standstill. Local commercial banks were saddled with nonperforming loans estimated at US$4.5 billion to US$5.5 billion. Concessionaires and their affiliates have been faced with writing off large portions of their investments. And users were left with some of the highest tolls in the world. The author diagnoses the flaws in the design of the program and shows how the failure was manifested in the implementation of different phases of the projects.
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Privatizing Roads-A New Method for Auctioning Highways
Author:
Eduardo Engel, Ronald Fischer, and Alexander Galetovic
Source:
Public Policy Journal No. 112, the World Bank, May 1997.
The authors attribute many of the problems in highway privatization to the combined effect of features of the highway business and the fixed term contracts used. First, traffic forecasts are notoriously imprecise, and the franchise holder has almost no control over demand. Second, most franchises have been awarded for a fixed term that is independent of demand realization. They propose a new mechanism--the least-present-value-of-revenue auction--that overcomes flaws in the fixed term franchise because the contract term automatically adjusts to traffic growth. If traffic grows more slowly than expected, the term lengthens--and if more rapidly, it shortens. The basic principle underlying the auction is that the franchise holder should not make losses when the long-run demand for the highway is sufficient to pay all costs.
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