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on Project, Program and Portfolio Management |
| By: | Engel, Eduardo (Yale University); Fischer, Ronald (University of Chile); Galetovic, Alexander (Universidad de los Andes, Chile) |
| Abstract: | We examine the economics of infrastructure finance, focusing on public provision and Public-Private Partnerships (PPPs). We show that project finance is appropriate for PPP projects, because there are few economies of scope and because assets are project specific. Furthermore, we suggest that the higher cost of finance of PPPs is not an argument in favour of public provision, since it appears to reflect the combination of deficient contract design and the cost-cutting incentives embedded in PPPs. Thus, in the case of a correctly designed PPP contract, the higher cost of capital may be the price to pay for the efficiency advantages of PPPs. We also examine the role of government activities in PPP financing (e.g. revenue guarantees, renegotiations) and their consequences. Finally, we discuss how to include PPPs revenue guarantees and the results of PPP contract negotiation in the government balance sheet. |
| Keywords: | Fiscal accounting; PPP premium; Project finance; Renegotiations; Revenue guarantees; Special Purpose Vehicule |
| JEL: | G32 H54 R42 |
| Date: | 2010–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:ris:eibpap:2010_002&r=ppm |
| By: | Wagenvoort, Rien (European Investment Bank, Economic and Financial Studies); de Nicola, Carlo (European Investment Bank, Economic and Financial Studies); Kappeler, Andreas (European Investment Bank, Economic and Financial Studies) |
| Abstract: | This article is the first attempt to compile comprehensive data on infrastructure finance in Europe. We decompose infrastructure finance by institutional sector (i.e. public versus private) into its main components, which consist of traditional public procurement, project finance and finance by the corporate sector, and analyse how the roles of the public and private sectors in financing infrastructure have evolved over time, especially during the recent economic and financial crisis. In contrast with government finance that is slightly up, private finance, in particular project finance through Publi-Private Partnerships, has fallen substantially during the recent crisis, reversing, at least temporarily, the longer-term trend of more private and less public financing of infrastructure. |
| Keywords: | Infrastructure investment; Public-Private Partnerships; Project finance; Crisis impact |
| JEL: | G20 H54 L32 |
| Date: | 2010–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:ris:eibpap:2010_001&r=ppm |
| By: | Fay, Marianne (The World Bank); Iimi, Atsushi (The World Bank); Perrissin-Fabert, Baptiste (The World Bank) |
| Abstract: | Developing countries are faced with a substantial and persistent infrastructure deficit. Climate change complicates this challenge, affcting the way we design and manage infrastructure (defined here as transport, power, water and sanitation) and increasing costs. But all s not negative: Climate change affects both the economic and financial analysis of infrastructure projects in a way that could help achieve long-pursued but elusive goals, such as better maintenance and greener, more efficient design. Further, climate finance could bring additional financing, although that will require increasing the scale of available resources and addressing the fact that climate finance tends to provide ex post financing, ill-suited to a sector characterized by a need for substantial ex ante funding. |
| Keywords: | Infrastructure finance; Developing countries; Climate change; Adaptation; Mitigation; Inertia; Uncertainty |
| JEL: | D81 H54 H81 Q54 |
| Date: | 2010–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:ris:eibpap:2010_007&r=ppm |
| By: | Inderst, Georg (Georg Inderst Independent Advisory) |
| Abstract: | Infrastructure as a new asset class is said to have several distinct and attractive investment characteristics. This article reviews concepts, market developments and empirical evidence on the rist-return and cash flows profile, and the potential for diversification and inflation protection in investor portfolios. Furthermore, a new, global analysis of the historical performance of infrastructure funds is undertaken. There is no proper financial theory to back the proposition of infrastructure as a separate asset class. Infrastructure assets are very heterogeneous, and empirical evidence suggests an alternative proposition that treats infrastructure simply as a sub-asset class, or particular sectors, within the conventional financing vehicule on which it comes (e.g. listed and private equity, bonds). |
| Keywords: | Infrastructure investment; Infrastructure fund; Alternative asset; Real asset; Asset allocation; Performance analysis |
| JEL: | G11 G15 G22 G23 H54 |
| Date: | 2010–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:ris:eibpap:2010_003&r=ppm |
| By: | Dakshina G De Silva; Timothy Dunne; Georgia Kosmopoulou; Carlos Lamarche |
| Abstract: | Programs that encourage the participation of disadvantaged business enterprises (DBE) as subcontractors have been a part of government procurement auctions for over three decades. In this paper, we examine the impact of a program that requires prime contractors to subcontract out a portion of a highway procurement project to DBE firms. We study how DBE subcontracting requirements affect bidding behavior in federally funded projects. Within a symmetric independent private value framework, we use the equilibrium bidding function to obtain the cost distribution of firms undertaking projects either with or without subcontracting goals. We then use nonparametric estimation methodsto uncover and compare the cost of firms bidding on a class of asphalt projects related to surface treatment in Texas. The analysis shows little differences in the cost structure between auctions that have subcontracting goals and those that do not. |
| Keywords: | Auctions ; Government purchasing |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1102&r=ppm |
| By: | Jean-Christophe MARTIN (GREThA, CNRS, UMR 5113); Patrick POINT (GREThA, CNRS, UMR 5113) |
| Abstract: | The region of Aquitaine, located in south-west of France, has implemented a climate plan for the period 2007-2013 in order to avoid 2 883 ktCO2eq per year for 2013. But this region is an important place of transit’s flow between northern Europe and southern Europe. The share of goods transport represents about 30% of road traffic of the Aquitaine region. Moreover, traffic from road transport will not be stabilized according to Becker’s report (2001). As a result, the region council of Aquitaine has planned some road projects in order to increase traffic capacities to avoid too much congestion costs. But, investments decision concerning construction of road infrastructure is performed by cost-benefit analysis. A project leading to an increase of greenhouse gas (GHG) emissions could have also a positive net social benefit. If regional council of Aquitaine wants to realize their road projects, it has to implement some GHG offsetting projects. The computation of opportunity cost of projects of road infrastructure construction must be a useful indicator to determine the maximum budget for GHG offsetting projects. This analysis, far away from substituting to cost-benefit analysis, is however complementary to it. We calculated, for Aquitaine region, the budget of opportunity cost of road projects: it was estimated by €2001 1 920 M and €2001 3 592M respectively for a moderate and high increase of traffic for 2007-2013. |
| Keywords: | Input-output analysis, minimum disruption approach, eco-environmental impacts, opportunity cost, road transport, greenhouse gas emissions |
| JEL: | C61 C67 D57 D61 H54 Q54 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2011-03&r=ppm |
| By: | J. Edward Taylor |
| Abstract: | The purpose of this guideline is to make praticioners aware of simulation approaches for the evaluation of tourism projects. Simulation approaches are particularly useful when experimental or economic approaches for project evaluation are not feasible. For example, it usually is not possible to roll out a tourism-promotion program for a randomly chosen “treatment group” while excluding the program’s benefits for a “control group” at the tourist destination. The guideline explains why a simulation approach is useful for tourism impact analysis, what a simulation model for the economic analysis of tourism impacts looks like, and data requirements. With the help of an illustrative two-island model, the guideline shows how to construct different kinds of simulation models and how to use simulations to quantify the costs and benefits of tourism and tourism projects. The guideline concludes by discussing some specific IDB projects in which this methodology has been used for tourism impact analysis. The primary goal of this paper is to make development practitioners aware of simulation approaches for tourism impact analysis and of how to integrate these approaches into their project proposals, budgets, and terms of reference for expert consultants. |
| Keywords: | Tourism, Impact Evaluation, Regional Development, Simulation, General Equilibrium Models, Poverty, Development Effectiveness |
| JEL: | C81 L83 O12 O18 O22 R11 R58 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:idb:spdwps:1008&r=ppm |