Risk Profiles of Different Privatization and PPP Models in the Road sector

PRIVATISATION AND THE USE OF PUBLIC PRIVATE PARTNERSHIPS(PPP) MODELS IN THE PROVISION OF ROAD AND HIGHWAYINFRASTRUCTURE HAS CONTINUOUSLY GAINED IN IMPORTANCEWORLDWIDE AND IN PARTICULAR IN EUROPE DURING THE LASTYEARS. TRADITIONALLY CONSIDERED AS A TYPICAL PUBLIC DOMAIN,MORE AND MORE OF THE TASKS AND RESPONSIBILITIES, AND WITHIT ALSO THE RELATED RISKS HAVE BEEN TRANSFERRED OVER TIMETO THE PRIVATE SECTOR. ISOLATED SERVICES OF THE WHOLE VALUECHAIN LIKE PARTS OF THE DESIGN AND SUPERVISION OF WORKS,THE CONSTRUCTION AND PARTS OF THE MAINTENANCE ANDOPERATION HAVE ALWAYS BEEN RENDERED BY PRIVATE COMPANIES.NEVERTHELESS, THERE WAS A STRONG DOMINANCE OF THE PUBLIC ADMINISTRATION NOT ONLYBY DEFINING THE NEED FOR INFRASTRUCTURE, BUT ALSO BY FINANCING IT AND BY DESCRIBINGAND CONTROLLING IN DETAIL THE INPUT ORIENTED SERVICES NECESSARY TO SATISFY THENEED. CONSEQUENTLY, IN APPLYING THIS TRADITIONAL PROCUREMENT METHOD, THE PUBLICSECTOR BEARS ALL MAJOR INHERENT RISKS SUCH AS RISK OF FINANCE, EFFICIENT UTILISATION,PROPER AVAILABILITY, SAFETY, QUALITY OF COMFORT, COST OVERRUNS ETC. EXCEPT FOR THETYPICAL PERFORMANCE RISKS TRANSFERRED TO THE PRIVATE PARTNER THROUGH INDIVIDUALSERVICE CONTRACTS. ANOTHER CRITICAL RISK THAT REMAINS WITH THE PUBLIC SECTOR IS THEINTERFACE RISK BETWEEN THE DIFFERENT SERVICE PROVIDERS IN THE LIFE CYCLE OF THE INFRASTRUCTUREASSET, I.E. THE DESIGNERS AND THE DIFFERENT CONTRACTORS FOR CONSTRUCTIONAND MAINTENANCE.