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Measuring the value of public–private partnership

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  • Josef Jilek

    (Škoda Auto University)

Abstract

There is a value of public–private partnership (PPP) for investors. The question is how to measure this value. There is significant financing component in any PPP because the grantor provides the operator (and consequently the investors) with a significant benefit of financing the construction. When measuring the value of financing the discount rate corresponding to separate financing transaction between operator and grantor at PPP inception. The payments for construction by grantor to operator and subsequently to investors can be decomposed into three components: (i) payments to construction company; (ii) accrued interest on debt of grantor; and (iii) lump sum PPP value for operator and subsequently for investors.

Suggested Citation

  • Josef Jilek, 2024. "Measuring the value of public–private partnership," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 71(4), pages 917-932, December.
    • Handle: RePEc:spr:inrvec:v:71:y:2024:i:4:d:10.1007_s12232-024-00473-8
    DOI: 10.1007/s12232-024-00473-8
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Public–private partnerships; Value; Project finance;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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