VALUING PUBLIC SECTOR REVENUE RISK EXPOSURE IN TRANSPORTATION PUBLIC-PRIVATE PARTNERSHIPS

摘要

This paper presents a methodological framework to evaluate public sector financial riskexposure when delivering transportation infrastructure through public-privatepartnerships (PPP) in the United States (US). Transportation agencies worldwide andacross the US are increasingly using PPPs as a mechanism to deliver infrastructure. Ananalysis of international experience conducted for this research shows that countries withrelatively more extensive experience in PPPs than the US have devised sophisticatedmethodologies to value and manage risk exposure in the context of value for money(VfM) and optimum allocation of project risks. On the other hand, a review of major UStransportation PPP transactions reveals that US states currently lack a well-documentedmethodology to quantify and incorporate the cost of public sector risk into the evaluationof PPP projects. This analysis indicates that US transportation agencies couldsignificantly benefit from implementing more systematic approaches to incorporate thecost of risk in the evaluation of PPP projects. The framework proposed in this researchwas developed as a tool to facilitate this process. It is based upon successful internationalexperience with VfM analyses and provides a step-by-step methodology to quantify riskexposure and facilitate the estimation of the risk-adjusted costs of delivering a project asa PPP. The methodology is based on the concept of contingent liabilities and uses optionpricing techniques to quantify public sector risk exposure. The application of themethodology is demonstrated using two US transportation PPP case studies.