Balancing Parties' benefits and understanding the risks in PPP highway Projects

摘要

Public Private Partnerships (PPPs) have been increasingly used globally to procure highway projects. Participants in such projects come to project negotiation with different concerns and objectives. For example, private investors and their financiers seek to reap adequate returns on investment within a short timeframe in sufficiently stable environments. Government wants to maximize productivity efficiency, ensure the project achieves relevant quality, environmental standards and social objectives. Publics pay tolls and other charges for using the highway. Therefore, balancing different party's objectives are necessary. Based on review of existing highway concession contracts, this paper argues toll adjustment is the most important measure to balance project participants' benefits during the contract concession period. Following this, the paper proposes toll adjustment should consider not only economic risks to protect investor's benefit, but also service performance risks to ensure users' interest. At last, based on literature review, risks with respect to toll adjustment were identified from private investors' and user's perspectives respectively.