Transport

Public-private partnerships have played an increasingly central role in answering the pressing need for new and well-maintained roads, tunnels, bridges, airports, ships, railways, and other forms of transportation. Internationally, transportation has been far and away the largest area of PPP investment.41

Several factors make most transportation infrastructure ideal for PPPs. First, the strong emphasis on the role of cost and efficiency helps to align private and public interests. Second, the growing (but by no means universal) public acceptance in many countries of associated user fees for assets such as roads and bridges makes private financing easier in this sector than others where the government must pay the private sector a fee for providing the service. The ability to limit participation to paying customers, in the form of train tickets or bridge tolls, ensures a revenue stream that can offset all or some of the cost of provision in many countries-a format readily understood by the private sector. Third, the scale and long-term nature of these projects are well served by PPPs.

Australia's transport sector was one of the first to use PPPs to deliver infrastructure, with the states of Victoria and New South Wales pioneering public-private road partnerships. Sydney now has the world's largest network of urban toll roads. As of October 2005, approximately 25 percent of all contracted PPP projects within Australia were related to the transport sector.42

Spain and Italy also have considerable experience using PPPs for roads. Most of the existing toll highways in Spain were put out to concession in the 1960s.43 Today, the government hopes to use PPPs to fund one-third ($113 billion) of the estimated investment needed in road and rail between 2006 and 2020.44 Similarly, the transportation sector makes up the bulk of PPPs in Italy (with a value of $11.4 billion).45

In the United States, a $21 billion investment in 43 major highway facilities has been undertaken using various public-private partnership models over the last dozen years. California, Florida, Texas and Virginia are leaders in this field, accounting for 50 percent of the total dollar volume ($10.6 billion) through 18 major highway PPP projects.46