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Financing transport infrastrucure projects in Italy: a critical analysis of the main approaches

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  • Laurino, Antonio
  • Beria, Paolo
  • Grimaldi, Raffaele

Abstract

This paper aims at analysing the methodology used for financing large infrastructure projects in Italy. In particular, it focuses on the Italian highway sector, where in the last years many projects have been launched using new financial instruments. The paper discusses three of these “instruments”. The first one is the Project Financing, discussed starting from a general review, analyzing also the different typologies used, the risks involved and their allocation among the various subjects that take part in the PF mechanism. A special case concerns the recently introduced model used for the Italian highways, known as “PF with takeover compensation”. There are two other important mechanisms used for financing infrastructure projects in Italy: the exploitation of road demand rigidity and the spreading of the investment over the entire network, favouring larger concessions. We conclude that all these three mechanisms present deep flaws in terms of transparency and of contradiction with economic feasibility criteria (that have to dominate the public investment rationale).

Suggested Citation

  • Laurino, Antonio & Beria, Paolo & Grimaldi, Raffaele, 2010. "Financing transport infrastrucure projects in Italy: a critical analysis of the main approaches," MPRA Paper 29140, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:29140
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    File URL: https://mpra.ub.uni-muenchen.de/29140/1/MPRA_paper_29140.pdf
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    References listed on IDEAS

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    1. Anna Matas & José-Luis Raymond, 2002. "The demand elasticity on tolled motorways," Working Papers wp0203, Department of Applied Economics at Universitat Autonoma of Barcelona.
    2. André Palma & Nathalie Picard & Laetitia Andrieu, 2012. "Risk in Transport Investments," Networks and Spatial Economics, Springer, vol. 12(2), pages 187-204, June.
    3. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, December.
    4. Paolo Beria & Marco Ponti, 2009. "Lo stato della regolazione dei trasporti in Italia," Economia dei Servizi, Società editrice il Mulino, issue 3, pages 465-484.
    5. Olivier Debande, 2002. "Private Financing of Transport Infrastructure: An Assessment of the UK Experience," Journal of Transport Economics and Policy, University of Bath, vol. 36(3), pages 355-387, September.
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    Cited by:

    1. Beria, Paolo & Ramella, Francesco & Laurino, Antonio, 2015. "Motorways economic regulation: A worldwide survey," Transport Policy, Elsevier, vol. 41(C), pages 23-32.

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    More about this item

    Keywords

    transport; investment; infrastructure; project financing; highway.;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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