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Public Private Partnerships in Housing and Urban Development

Public Private Partnerships in Housing and Urban Development

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Published by Oswar Mungkasa

UN Habitat, 2011

UN Habitat, 2011

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Published by: Oswar Mungkasa on Dec 26, 2012
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03/15/2014

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In urban transport, PPPs have emerged as an
efective tool for the expansion, maintenance,
and construction of new roads, railways,
airports, seaports and other forms of transport.
Internationally, the developing regions have
seen a veritable increase of such arrangements
in the last 10 years (see fgure 5). Transport
is also the largest area of PPP investment in
developed countries such as Australia, Spain,
Italy, and the US.45

Long-term concession lease
models, which allow the public sector to retain
ownership of the asset after the leasing period
is complete, are by far the most prominent
form of PPPs in this sector. Under this PPP
model, the private partner commonly limits
transport access to paying customers, ensuring
a revenue stream that can ofset all, or some
of the cost of provision. Correspondingly, the
fnancial viability of urban transport projects
makes this sector a more attractive investment
option to the private partner, particularly in
developed countries where there is a growing
public acceptance of tolls, or other user fees
for roads and bridges.

Tat being said, the sheer scale and long-
term nature of some of these projects,
combined with the need for, and dependence
on, accurate trafc demand forecasting in this
sector signifcantly increases the fnancial risk
absorbed by the partnership.46

Tus, given
the highly complex nature of transport PPPs,
these arrangements can be particularly risky
for developing markets that lack the resources
and relative expertise on such matters.

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