Transport pricing and Public-Private Partnerships in theory: Issues and Suggestions

This chapter offers a theoretical examination of the following questions: what are the issues that arise when Social Marginal Cost Pricing is to be incorporated in Public-Private Partnerships (PPPs); and how may these issues be dealt with? We first briefly discuss Public-Private Partnerships in transport: what are the defining characteristics and what are the main types that exist in the different modes of transport? Next we consider the economics of Public-Private Partnerships, in particular from the viewpoint of incentives. Subsequently we identify and examine the issues that arise when Social Marginal Cost Pricing is to be incorporated in PPPs as a regulation with regard to pricing in the transport sector. Lastly, we investigate the possibilities of resolving these issues.