Alain Quinet - Articles and news items
The infrastructure managers and capacity allocation bodies put Rail Freight Corridor 2 on the tracks
Rail industry news / 21 March 2013 /
Rail Freight Corridor 2: a European rail transport route…
Issue 6 2012 / 27 November 2012 /
Railway investment requires long-term funding. Sometimes the State will choose to take direct ownership or may even prefer to transfer all or part of the responsibility and risk to the private sector. Public-Private Partnerships (PPPs) can offer a highly flexible way of combining public and private funding.
These highly flexible approaches include:
The terms of the contract reflect the extent of the business risk that the public sector wishes to transfer to the private sector. Part nership contracts delegate the task of designing, financing, building and operating specific infrastructure in return for payments to be made throughout the operating period. With a concession, the private sector takes on not only the above risks but also the business risk.
The length of the contractual period reflects the extent of the maintenance risk trans ferred. In the rail sector, contracts in excess of 30 years are synonymous with transfer to the private sector of the risks inherent in track renewal.
The life-cycle of railway infrastructure is long and the risk of obsolescence sufficiently small to make private debt a realistic option, even on the basis of relatively small net assets.