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Changing perceptions on PPP games: Demand risk in Irish roads

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  • Burke, Richard
  • Demirag, Istemi

Abstract

This study is based on three Irish operational toll road public private partnership (PPP) case studies, including interviews with 38 key stakeholders. Our findings show that the Irish Government's treatment of risk and its transfer to the private partner in PPPs are changing over time. Regulatory changes, which have led to increased finance costs, coupled with a severe global economic crisis, have exacerbated the difficulties in funding PPPs. The goalposts in Irish PPPs appear to be changing in favour of the private partner at the expense of the taxpayers, who are the losers in the PPP game. The Government are also suggesting that they may potentially step in, if projects experienced financial difficulty and the special purpose vehicle (SPV) may require specific guarantees in order to participate in future PPP projects. Pricing of demand risk also differs from the Government's rhetoric that it is being priced realistically. In practice, we find that it is priced aggressively by the SPV in order to win PPP contracts. The paper discusses the possible implications of these findings for value for money (VFM) and, ultimately, taxpayers.

Suggested Citation

  • Burke, Richard & Demirag, Istemi, 2015. "Changing perceptions on PPP games: Demand risk in Irish roads," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 27(C), pages 189-208.
    • Handle: RePEc:eee:crpeac:v:27:y:2015:i:c:p:189-208
    DOI: 10.1016/j.cpa.2013.11.002
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    5. Dónal Palcic & Eoin Reeves & Anne Stafford, 2018. "Lifting the Lid: the Private Financing of Motorway PPPs in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 49(2), pages 217-239.
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    8. Salman Ahmad & Shahnawaz Khan & Shah Wali Khan, 2016. "Developing Infrastructure through Public Private Partnerships; Understanding the Elements of the Enabling Environment," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 8(1), pages 19-34, April.

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