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Innovative Infrastructure Fund to Ensure the Financial Sustainability of PPP Projects: The Case of Chile
Article

Is Ex-Post Fiscal Support to PPPs Sustainable? Analysis of Government Loans Granted to Shadow-Toll Roads in Spain: A Case Study

Centro de Investigación del Transporte (TRANSyT), Universidad Politécnica de Madrid, Calle Profesor Aranguren 3, 28040 Madrid, Spain
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Sustainability 2021, 13(1), 219; https://doi.org/10.3390/su13010219
Received: 6 November 2020 / Revised: 14 December 2020 / Accepted: 23 December 2020 / Published: 28 December 2020
Budgetary constraints are prompting many governments to encourage private financing of transport infrastructure through public–private partnerships (PPPs). Fiscal support measures are often used to improve the financial feasibility of PPPs and to rebalance the economics of contracts to compensate for government-imposed changes. In the latter case, information asymmetry, political haste, and lack of competition may lead to poor government decisions in establishing support measures. Furthermore, lack of government support may lead to early termination of contracts and non-implementation of projects with high potential social benefits. This paper analyzes the awarding of subordinated public participation loans (SPPLs) to 10 brownfield shadow-toll highway PPPs in Spain after the government imposed additional works. It is hypothesized that, given the political importance of the projects and the viability problems they soon experienced, the government may not have set out the terms of SPPLs efficiently. This paper evaluates the financial and social impacts of awarding these loans to three of these projects to assess whether the government’s decision to support them was justified from a sustainable perspective. The results show that, while the government’s decision was reasonable, the design of the SPPL and its awarding conditions should be improved to ensure the public interest. View Full-Text
Keywords: government support; financial sustainability; infrastructure financing; public-private partnerships; shadow-toll road government support; financial sustainability; infrastructure financing; public-private partnerships; shadow-toll road
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MDPI and ACS Style

Garrido, L.; Vassallo, J.M. Is Ex-Post Fiscal Support to PPPs Sustainable? Analysis of Government Loans Granted to Shadow-Toll Roads in Spain: A Case Study. Sustainability 2021, 13, 219. https://doi.org/10.3390/su13010219

AMA Style

Garrido L, Vassallo JM. Is Ex-Post Fiscal Support to PPPs Sustainable? Analysis of Government Loans Granted to Shadow-Toll Roads in Spain: A Case Study. Sustainability. 2021; 13(1):219. https://doi.org/10.3390/su13010219

Chicago/Turabian Style

Garrido, Laura, and José M. Vassallo 2021. "Is Ex-Post Fiscal Support to PPPs Sustainable? Analysis of Government Loans Granted to Shadow-Toll Roads in Spain: A Case Study" Sustainability 13, no. 1: 219. https://doi.org/10.3390/su13010219

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