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In transport infrastructure concessions, the sources of revenue to the private partner (or concessionaire) may include (i) the infrastructure users (e.g., tolling, in the case of roads), (ii) the government (e.g. through availability payments), and (iii) both users and government, which might be called a hybrid concession. An example of the latter is a road concession where the concessionaire is allowed to charge tolls to the road users but, because of relatively low revenues, the government agency might have to complement the toll revenue. This paper summarizes the cases where it may be justified for the government to complement users revenues and describes a model developed for the financial assessment of road concessions involving both tolling and government payments. The methodology described for roads can also be applied to other forms of transport infrastructure. A practical application of the model is demonstrated in the paper. For example, given traffic volumes and maximum acceptable toll rates for a particular road project, the model can be used to estimate the minimum availability payment that would be required for the project to attract private sector interest, that is, potential bidders in a competitive bidding scenario. The model can also be used to carry out sensitivity analyses of the impact of key input parameters on outputs such as the investors return on equity and annual debt service cover ratio.

In a road concession, the sources of revenue to the private partner (or concessionaire) may include (i) the road users (e.g., tolling), (ii) the government (e.g. through availability payments), and (iii) both road users and government, which might be called a hybrid concession. An example of the latter is a road concession where the concessionaire is allowed to charge tolls to the road users but, because of relatively low traffic volumes and/or toll rates, the government agency (e.g. roads department) would have to complement the toll revenue, for example through annual payments, which are usually called availability payments (or annuities, as in South Asia). This paper summarizes the cases where it may be justified for the government to complement toll revenues and describes a model developed for the financial assessment of road concessions involving both tolling and availability payments. A practical application of the model is demonstrated in the paper. For example, given traffic volumes and maximum acceptable toll rates for a particular road project, the model can be used to estimate the minimum availability payment that would be required for the project to attract private sector interest, that is, potential bidders in a competitive bidding scenario. The model can also be used to carry out sensitivity analyses of the impact of key input parameters (e.g. capital cost, concession life, loan terms) on outputs such as the investors return on equity and annual debt service cover ratio.

Over the last couple of decades there has been an increased interest by road agencies to adopt performance based contracts (PBC) for road maintenance as a means to increase the efficiency of maintenance operations. PBC is a type of contract in which payments for the management and maintenance of road assets are explicitly linked to the contractor successfully meeting or exceeding certain clearly defined minimum performance indicators. This paper presents the development of a user-friendly tool for estimating the annual payments by the government that will be required by potential contractors to undertake a PBC project. The model is expected to be useful to both the public and the private sectors. For example, a road agency planning to launch a PBC program will need to make an estimate of the annual payments that the agency will have to make to the private contractors. Conversely, private contractors interested in competing for the PBC program will have to make an estimate of the annual payments to include in their bids. The applicability of the tool is demonstrated through a numerical example of a potential road PBC project. The model can also be applied to other types of transport infrastructure, such as a railway or waterway. The model can be used to carry out sensitivity analyses. For example, the user can change the value of an input parameter (e.g., construction cost) and obtain the resulting impact on the project financial internal rate of return, or other key model output. ; Presented during Session 22: Performance Based Contracts, moderated by Ian Greenwood, at the 9th International Conference on Managing Pavement Assets (ICMPA9) in Alexandria, VA ; Includes conference paper and PowerPoint slides.

Public private partnership (PPP) is a project delivery method which is used in many countries. The main advantage of this method compared with traditional method is in the allocation of private funds which are used for public goods. Under road PPP projects a commonly used mechanism for the repayment of the private investment is charging tolls to the facility users. Although the toll rate may be set by the government, there are certain constraints which the minimum toll rate has to meet. These constraints are mainly related to financial parameters such as project's internal rate of return (IRR) and debt service coverage ratio (DSCR). In addition to these constraints, other project's parameters such as construction cost, or level of government subsidies also have an impact on toll rates. The objective of this paper is to investigate the relationship between the level of toll rates and several project technical parameters. ; Javno privatno partnerstvo (JPP) je metoda realizacije projekta koja se koristi u mnogim zemljama. Glavna prednost ove metode u poređenju sa tradicionalnom metodom je u korišćenju privatnih fondova za javne projekte. U slučaju JPP projekata za puteve, uobičajeni mehanizam servisiranja privatnih investicija je preko naplate putarine korisnicima puta. Iako visina putarine može biti određena od strane države, postoje određena ograničenja koje minimalna visina putarina mora da zadovolji. Ova ograničenja se uglavnom odnose na finansijske parametre kao što su interna stopa rentabiliteta projekta ili indeks servisiranja duga. I ostali projektni parametri kao što su cena izgradnje projekta ili nivo učešća države kroz subvencije takođe imaju uticaja na visinu putarine. Cilj ovog rada je da se istraže zavisnosti između visine putarine i nekoliko tehničkih parametara projekta.

Public private partnership (PPP) is a project delivery method which is used in many countries. The main advantage of this method compared with traditional methods is in the allocation of private funds which are used for providing public services and delivery of projects such as hospitals, schools, roads, and bridges. Under road PPP projects, a commonly used mechanism for the repayment of the private investment is the user charge system, i.e., charging tolls to the facility users. Although the toll rate may be set by the government, there are certain constraints which the minimum toll rate has to meet. These constraints are mainly related to financial parameters such as project's financial internal rate of return (IRR) and debt service coverage ratio (DSCR) which private investors evaluate during the decision making process. In other words, there is a minimum toll rate required to attract private investments. In addition to the financial constraints, other project's parameters such as construction cost, concession life, or level of government subsidies also have an impact on toll rates. The objective of this paper is to investigate the relationship between the level of toll rates and several project technical and financial parameters. A financial model included in the Toolkit for PPP in Roads and Highways, developed by the World Bank and the Public-Private Infrastructure Advisory Facility (PPIAF), is used as a tool to calculate toll rates for various sets of input values. The approach which was chosen to test sensitivity of selected parameters to potential changes in input values (e.g., technical and financial parameters) is by estimation of elasticities.

Corruption is a social evil that resonates far and deep in societies, eroding trust in government, weakening the rule of law, impairing economic development, and exacerbating poverty, social tension, and inequality. Each phase of infrastructure development life cycle has peculiar vulnerabilities to corrupt practices. Pre-emptive identification of avenues for corrupt actions at each phase can serve as a starting point for new initiatives or for renewed reinforcement of existing corruption mitigation programs. The existing literature on corruption does not address the issue from an infrastructure life cycle perspective. The objective of this paper is to identify opportunities at each phase of the infrastructure life cycle where stakeholders and actors can help undertake specific actions to mitigate corruption. The paper's methodology characterizes corruption and mitigation measures in a framework based on the phases of infrastructure development life cycle and then connects these measures to the relevant actors and stakeholders.