With respect to the development of PPPs within the TEN-T, the financial instrument designed specifically to encourage PPPs, the LGTT, has served and keeps serving its originally designed purpose, but in order to increase the number of transport PPPs that could benefit from it, further instruments based on the LGTT could be developed.
To date, the LGTT has been used in several PPPs, most of them toll roads, although a rail project with track access charges is considering its use. Although there is a solid pipeline of projects interested in utilising the LGTT, it has two limitations: (i) demand-based PPPs are primarily suitable for toll road projects. Road projects are not a top priority for the remaining TEN-T budget appropriations; and (ii) the trend in PPP arrangements is towards the availability payment scheme, in part due to the development of PPP arrangements for high speed rail and partly due to the more balanced risk allocation that can be achieved through availability payment mechanisms. Demand risk has two elements that are not controllable by the private sector - the presence of competitive alternative routes and macro-economic factors - making it a risk not easily transferable to the private sector.