Secondary markets are expanding in Europe, Canada, Latin America and Australia. There is a clear sequence as regions and states adopt PPP legislation and programmes and the number of PPP projects increases, equity transactions begin to occur in the first batch of projects leading to the formation of a secondary market.
It is also evident that companies who win PPP bids, such as Bilfinger and John Laing, who are connected with listed infrastructure funds, the Bilfinger Berger Global Infrastructure Fund (Luxembourg) and the John Laing Infrastructure Fund (Guernsey) respectively, will almost certainly transfer their equity to these funds soon after the projects are operational. In other words, the selection of certain bidders will largely determine the future ownership of SPC shares.
Two Australian companies, Macquarie Group (consisting of several infrastructure funds) and Babcock & Brown Limited, played a key role in the internationalisation of infrastructure finance and PPPs (Whitfield, 2010). Each had a three-tier structure with the group company holding between 8%-10% equity in subsidiary companies with long-term management and advisory agreements and debt. Both built large portfolios of assets by a combination of buying infrastructure assets and by funding and managing PPPs.
However, heavy losses forced Macquarie to sell assets and Babcock Brown went into administration in 2009. A management buyout established Amber Infrastructure and International Public Partnerships, which led to the transfer of equity in 50 PPP projects (not included in the Global database because it is the sale of a secondary market fund, similar to those in the UK - see Appendix 3).
The sale of equity in toll road PPPs has fuelled the internationalisation of secondary markets, particularly the trading of assets between Spain, Italy, US and Latin America. Part 8 examines the political economy of PPP transactions highlighting economic, public interest and accountability concerns and the growing power of offshore infrastructure funds. It concludes with a summary of the case against PPPs.