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Public-Private Partnerships : Risk Allocation and Value for Money

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  • Miranda Sarmento, J.
  • Renneboog, L.D.R.

    (Tilburg University, TILEC)

Abstract

This paper reviews the literature on the allocation and valuation of public-private partnerships (PPPs). First, the paper discusses why governments pursue PPPs and how value for money (VfM) is achieved. Second, the paper reviews the principles of risk allocation and valuation from an academic and public sector perspective. Both the private and public sector consider risk allocation to be a critical issue with respect to PPPs and VfM generation, although governments adopt a less complex approach to risk measurement. This paper analyses papers, case-studies, and reports concerning VfM from PPPs and concludes that, from an academic perspective, the majority of PPPs do not create VfM (government reports usually reach the opposite conclusion).
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Suggested Citation

  • Miranda Sarmento, J. & Renneboog, L.D.R., 2014. "Public-Private Partnerships : Risk Allocation and Value for Money," Discussion Paper 2014-017, Tilburg University, Tilburg Law and Economic Center.
    • Handle: RePEc:tiu:tiutil:b9218010-a357-4c0a-805a-75c939b81c89
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    Cited by:

    1. Dimas de Castro e Silva Neto & Carlos Oliveira Cruz & Joaquim Miranda Sarmento, 2017. "Understanding the patterns of PPP renegotiations for infrastructure projects in Latin America," Competition and Regulation in Network Industries, , vol. 18(3-4), pages 271-296, September.
    2. Penyalver, Domingo & Turró, Mateu & Williamson, John B., 2019. "Measuring the value for money of transport infrastructure procurement; an intergenerational approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 119(C), pages 238-254.
    3. Hongqiang Wang & Qiaoyan Lin & Yingjie Zhang, 2022. "Risk Cost Measurement of Value for Money Evaluation Based on Case-Based Reasoning and Ontology: A Case Study of the Urban Rail Transit Public-Private Partnership Projects in China," Sustainability, MDPI, vol. 14(9), pages 1-22, May.
    4. Carlos Oliveira Cruz & Joaquim Miranda Sarmento, 2020. "“Mobility as a Service” Platforms: A Critical Path towards Increasing the Sustainability of Transportation Systems," Sustainability, MDPI, vol. 12(16), pages 1-15, August.
    5. Domingues, Sérgio & Sarmento, Joaquim Miranda, 2016. "Critical renegotiation triggers of European transport concessions," Transport Policy, Elsevier, vol. 48(C), pages 82-91.
    6. Cruz, Carlos Oliveira & Sarmento, Joaquim Miranda, 2018. "The price of project finance loans for highways," Research in Transportation Economics, Elsevier, vol. 70(C), pages 161-172.

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    More about this item

    Keywords

    Public-Private Partnerships; risk; Risk allocation; Value for money;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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