Annual Privatization Report 2016: Surface Transportation
Long-term Public Private Partnerships (PPP) for highways are a global phenomenon of long duration. As documented by Jose Gomez Ibanez and John Meyer, the phenomenon began in the 1950s and 1960s, as France and Spain emulated the model pioneered by Italy prior to World War II. Italy’s national motorway systems were developed largely by either investor-owned or state-owned companies, operating under long-term franchises (called concessions in Europe). In exchange for the right to build, operate and maintain the highway for a period ranging from 30 to 70 years, the company could raise the capital needed to build it (typically a mix of debt and equity). The model spread to Australia and parts of Asia in the 1980s and 1990s, and to Latin America in the 1990s and 2000s. This report provides a roadmap for surface transportation privatization and includes a detailed synopsis of the associated barriers and benefits to doing so.