Public–private partnerships in roads and government support: trends in transition and developing economies

Abstract

Private participation in roads revived strongly in transition and developing countries between 2005 and 2008, growing during the period from US$6.2 billion to US$16.4 billion a year, a new historic peak. However, in view of the recent global financial crisis, there has been some retraction of private financing resulting in an investment of US$15.8 billion in 2009. Driving policy-makers' renewed interest in attracting private financing for roads is the need for greater investments to keep road networks in an acceptable condition and carry out social and economic expansion plans in a context of public budget constraints. An analysis is presented of recent trends in road projects with private participation in developing and transition economies, in view of the policies and models adopted by these countries. A procedure for estimating the minimum toll rates required to attract private investors is also presented.

Keywords:

• public–private partnerships
• roads
• tolls
• transition economies
• developing economies