MIT1_201JF08_lec20

MIT1_201JF08_lec20 - Transportation Project Finance 2...

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Unformatted text preview: Transportation Project Finance 2 Public-Private Partnerships Jon Bottom Steer Davies Gleave 13 November 2008 Project Finance 2 PPPs Definitions Examples Public interest Capital limitations Other reasons PPP advantages Private interest General factors Infrastructure funds Strategic investors Private equity funds Policy issues Network development Network operations Other issues 1 / 41 Outline What are transportation PPPs? Definitions Examples of recent transportation PPP projects Reasons for public sector to pursue PPPs Limitations on traditional capital sources Other reasons Advantages of PPP to the public sector Reasons for private sector to pursue PPPs General factors explaining private sector interest Infrastructure equity funds Strategic industry investors Private equity funds PPP public policy issues Issues related to network development Issues related to network operations Other issues Project Finance 2 PPPs Definitions Examples Public interest Capital limitations Other reasons PPP advantages Private interest General factors Infrastructure funds Strategic investors Private equity funds Policy issues Network development Network operations Other issues 2 / 41 Outline What are transportation PPPs? Definitions Examples of recent transportation PPP projects Reasons for public sector to pursue PPPs Limitations on traditional capital sources Other reasons Advantages of PPP to the public sector Reasons for private sector to pursue PPPs General factors explaining private sector interest Infrastructure equity funds Strategic industry investors Private equity funds PPP public policy issues Issues related to network development Issues related to network operations Other issues Project Finance 2 PPPs Definitions Examples Public interest Capital limitations Other reasons PPP advantages Private interest General factors Infrastructure funds Strategic investors Private equity funds Policy issues Network development Network operations Other issues 3 / 41 What are PPPs? Situations where public services are provided by private entities under the terms of a time-limited concession contract Different from independent provision of public services by private entities subject only to regulatory oversight (privatization) The concession contract means that key features of the relationship between the public and private partners must be determined up front It also means that there is a time dimension to the service provision arrangements that needs to be taken into account in contract design Project Finance 2 PPPs Definitions Examples Public interest Capital limitations Other reasons PPP advantages Private interest General factors Infrastructure funds Strategic investors Private equity funds Policy issues Network development Network operations Other issues 4 / 41 Transportation PPPs 1 Brownfield PPP The public sector grants operating authority (not ownership) over an existing toll facility to the private partner for a given period of time. The private parter typically: time....
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MIT1_201JF08_lec20 - Transportation Project Finance 2...

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