Tips and Pitfalls in PPP design

The Public-Private-Partnership (PPP) procedure is a very appealing model, but as it becomes more and more used in practice, problems and failures have been observed in the management of many projects. Many of these unfortunate experiences are consequences of errors in the implementation of the procedure, but in other cases, clear errors of conception were the cause. Indeed, there are many ways to structure a PPP and PPP is not the only way to manage an infrastructure scheme. It is thus an important task to provide guidelines on whether to use PPP or other types of procurement and, in case a PPP is preferred, on how to design it. The aim of this chapter is to contribute to this task, trying to combine theoretical knowledge and practical experience. After a review of the variety of economic characteristics of transport infrastructure and their procurement conditions, we recall the reasons that may justify this association of public and private management which is the characteristic of PPP, outlining the limits of using pure private or pure public procurement. Then an analytic process is proposed, screening the parameters which matter most for choosing the PPP procedure among many possible ones, depending on the specificities of the various transport modes. This process gives also indications on key elements for implementing a PPP. Finally, the analytic process proposed is used for a generic analysis of, respectively, the motorways and port sectors, so as to test its practicability and customizing capability for the use of public authorities.