Roads – benefiting partners and users
The advantages of public-private partnership (PPP) in transportation infrastructure are obvious. For a start, the efficiency gains are substantial. Private enterprise partners are in a position to optimize a project's overall life-cycle costs, because as early as the design/planning and construction phase they minimize the subsequent ongoing costs of maintenance and repairs.
Users, too, benefit from public-private partnership models. Such models enable urgently needed investments in transportation projects to be carried out at last. New roads are less prone to traffic jams. And when transportation ventures are realized by private companies, the quality of the roads is better and stays better. The bid invitation documents for concessions define precisely the servicing level which the private operator has to guarantee and this ensures that the routes involved are always kept in excellent condition.
PPP models help to solve the increasingly critical problem of the public-sector investment backlog for building and upgrading roads, bridges and tunnels. The risks concerned are borne by the private partner. To give an example: if a transportation project goes into operation later than planned or if the construction costs are higher than budgeted, it is generally the private partner which has to absorb the additional outlay. The private company also bears the operator risk.
Private enterprise partners have to recoup their investments, of course, but that does not necessarily mean that the relevant roads have to charge tolls. One alternative that has become established is a so-called availability model. What this means is that the private partner receives payments from the public sector on the basis of the availability of the route concerned. Another possibility is the shadow toll. Here, once again, the private investor does not charge tolls but instead receives payments from the public-sector authority on the basis of the registered traffic volume.
HOCHTIEF Concessions is currently realizing or operating a total of seven road projects. Located in Germany, Austria, Greece and Chile, these have an aggregate length of more than 750 kilometers. The projects Herren tunnel (Germany) and Tunnel San Cristóbal and Vespucio Norte Express (both in Chile) are in operation. The roads Highway A4 (Germany), Elefsina-Patras-Tsakona and Maliakos-Kleidi (Greece) are undergoing extensive building and upgrading measures, without disrupting normal traffic. The A5 (Ypsilon) project in Austria went into operation at the beginning of 2010. Here, construction work has been concluded.
