Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/44848
Authors: 
Dewatripont, Mathias
Legros, Patrick
Year of Publication: 
2005
Citation: 
[Journal:] EIB Papers [ISSN:] 0257-7755 [Volume:] 10 [Year:] 2005 [Issue:] 1 [Pages:] 120-145
Abstract: 
This paper critically assesses the implications of contract design and risk transfer on the provision of public services under public-private partnerships (PPPs). Two results stand out. First, the alleged strength of PPPs in delivering infrastructure projects on budget more often than traditional public procurement could be illusory. This is - to put it simply - because there are costs of avoiding cost overruns and, indeed, cost overruns can be viewed as equilibrium phenomena. Second, the use of external (i.e., third-party) finance in PPPs, while bringing discipline to project appraisal and implementation, implies that part of the return on efforts exerted by the private-sector partner accrues to outside investors; this may undo whatever beneficial effects arise from 'bundling' the construction and operation of infrastructure projects, which is a hallmark of PPPs.
Document Type: 
Article

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