Evaluating Financial Options with Public or Private Funds in Delivering Transportation Infrastructure Projects
Public-Private Partnerships (PPP) have become a distinctively favored way of delivering transportation infrastructure projects, since such investments can be realized mostly by national and foreign private capital, while at the same time preserving the public interests. Nevertheless, despite their worldwide acceptance, there is still considerable debate as to whether a PPP scheme will most likely perform better than the traditional way of project delivery with exclusive public financing. Several approaches have been developed to effectively assess which of these two options is preferable for the public’s interest. The paper performs a review of these approaches and, with the scope to overcome their limitations, proposes a novel evaluation framework with the flexibility to be adapted to different types of transportation infrastructure projects. This provides for a direct comparison of the two options for project delivery, that is, private financing through PPP and public financing with conventional procurement, assuming that the implementation of the specific project has already been decided. The proposed three-step framework provides for risks and Public Sector Comparator assessment, and combines cost-effectiveness analysis with a Multi-criteria approach employing suitable indicators, such as Cost Effectiveness Ratios (CER), to reflect public interests. The final selection is based on the lower weighted CER. An application of the proposed methodology is carried out for “Egnatia Odos”, the largest road infrastructure project in Greece. The proposed framework can provide useful guidance in terms of transparency, validity, reliability and precision to the decision-making of other countries considering the PPP option for their transportation infrastructure projects.
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Supplemental Notes:
- This paper was sponsored by TRB committee ABE10 Revenue and Finance
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Corporate Authors:
500 Fifth Street, NW
Washington, DC United States 20001 -
Authors:
- Tsamboulas, Dimitrios A
- Kechagias, Grigorios
- Moraiti, Panayota
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Conference:
- Transportation Research Board 91st Annual Meeting
- Location: Washington DC, United States
- Date: 2012-1-22 to 2012-1-26
- Date: 2012
Language
- English
Media Info
- Media Type: Digital/other
- Features: Figures; References; Tables;
- Pagination: 20p
- Monograph Title: TRB 91st Annual Meeting Compendium of Papers DVD
Subject/Index Terms
- TRT Terms: Capital investments; Cost effectiveness; Decision making; Financing; Governments; Infrastructure; Multiple criteria decision making; Procurement; Project management; Public private partnerships; Transportation
- Geographic Terms: Greece
- Subject Areas: Administration and Management; Finance; Transportation (General); I10: Economics and Administration; I20: Design and Planning of Transport Infrastructure;
Filing Info
- Accession Number: 01373329
- Record Type: Publication
- Report/Paper Numbers: 12-2388
- Files: TRIS, TRB
- Created Date: Jun 21 2012 2:15PM