Steering a Tricky Course: Effective Public–Private Partnerships for the Provision of Transportation Infrastructure and Services
The Conference Board of Canada, 47 pages
Public–private partnerships are increasingly used to deliver transportation infrastructure projects. This report examines infrastructure projects in Canada and the U.K. to identify the factors that make for successful PPPs.
Public–private partnerships (PPPs) are increasingly being used to procure transportation infrastructure assets. But what are the factors that make for successful PPPs? A review of three case studies offers insights. The Confederation Bridge PPP shows that project risks can be successfully transferred to the private sector, and underscores the importance of having the procurement authority adapt its role to the requirements of a PPP. The London Underground PPPs demonstrate the use of innovative output-based performance measures, but they also show that significant uncertainty about major costs (such as upgrades to legacy assets) can impair the effectiveness of risk transfer to the private sector. As well, these PPPs suggest that governments should be cautious about imposing PPP delivery methods on lower levels of government. Finally, the Montréal metro project, which was not a PPP, provides insights on the importance of thorough project planning and the value of extensive due diligence.