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Public Private Partnership (ppp) - Articles and news items

RFF: First lessons learned from its four PPPs

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.

Portuguese high-speed rail business model: a new way forward on PPP

Issue 5 2010 / 17 September 2010 /

1 June 2009 marks the day, exactly 12 months after the international Public-Private Partnership (PPP) tender for the Poceirão–Caia high-speed rail line (HSRL) was launched, when best and final offers were in and the procedure which would lead to a successful financial close on 8 May 2010 was initiated.