Over the past two decades, the European public transport sector has experienced a substantial institutional evolution. First, reliance on contracting has become widespread over all transport modes. This has led more and more risk to be transferred to private operators. Second, competitive tendering practices have progressively replaced direct awarding of contractual rights. Finally, many municipal operators have been privatized. The utilization of PPPs for the realization of transport projects is a substantial part of this trend (Iossa and Martimort 2009). The Isle of Skye Bridge, which was completed in 1992 and connects the Isle of Sky to the mainland, was the first European transport project realized under the UK PFI approach (Grout 1997). Since then, PPPs have become widespread in urban transportation projects. They have also been used for big infrastructure projects and isolated links, such as the Eurotunnel and the London Underground upgrade-and-maintain project. After becoming very popular also in France, Italy and Spain, they have been recently adopted in Eastern Europe for the realization of transport infrastructure (European Investment Bank 2004).
The trend can also be observed outside Europe. In the U.S., the introduction of PPPs in transportation infrastructure dates back to the 1970s, when they were used to build inner-city infrastructure. Over time, PPPs have been extended to other road projects, such as the Dulles Greenway highway in Virginia and the SR-91 and SR-125 toll roads in California (CBO 2007), although main interstate highways are largely public. In many cases in the US, PPPs are used to raise financing for infrastructure, given the political difficulties in implementing taxes or even user charges. In Australia, toll roads were first built through PPP arrangements during the 1990s in New South Wales (Iossa and Martimort 2009).
Increasingly substantial involvement by the private sector in financing and building transport infrastructures has evolved: since the 1990s, the private sector has invested US$180 billion to develop transport projects in LDCs. Furthermore, 1000 private projects were in progress in 2006, most of them concerning roads and many others concerning railroads (Iossa and Martimort 2009).