The fantasy world of private finance for transport via public private partnerships

Jean SHAOUL, Anne STAFFORD and Pam STAPLETON
Manchester Business School,University of Manchester,
United Kingdom
September 2012

Discussion Paper No. 2012-6
Prepared for the Roundtable on: Public Private Partnerships for Funding Transport Infrastructure: Sources of Funding, Managing Risk and Optimism Bias
(27-28 September 2012)
International Transport Forum

A key message of this paper is that it is more costly for the public sector to use the private sector as financial intermediaries. This is due in part to the higher cost of commercial over public debt and the cost of the profit margin of both the private partner and its extensive supply chain. But there are also the not inconsiderable legal and financial advisors’ fees to each of the numerous parties to the transaction to structure and negotiate it

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Handbook of best practices at border crossings: A trade and transport facilitation perspective

OSCE - Organization for Security and Co-operation in Europe and UNECE
February 2012

A practical guide for government agencies and private sector bodies which operate border crossing points. Published by the OSCE and the United Nations Economic Commission for Europe.














Table of contents:

Foreword
Overview
1. Trade and Customs: The International Legal Framework
2. From Domestic to International Co-operation
3. Balancing Security with Trade and Transport Facilitation and Developing Partnerships with Private Industry
4. Processing of Freight: Policies for Control, Clearance and Transit
5. Risk Management and Selectivity
6. Options for the Design of Border Crossing Points
7. Information and Communications Technology and Non-Intrusive Inspection
Photo: OSCE

8. Human Resource Management
9. Measuring Border Agency Performance: Possibilities for Benchmarking
ANNEX 1: Border definitions
ANNEX 2: International organizations
Photo Credits
Abbreviations and Acronyms

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Geohazard management in the transport sector

World Bank
Transport notes series
Roads & Highways Thematic Group
March 2010

Geohazards can result in significant loss of human life as well as cause extensive damage to infrastructure. The magnitude and frequency of geohazard events ranges from earthquakes and tsunamis to landslides and flash floods. In the most severe cases involving the low frequency but more intense geohazards like earthquakes or tsunamis, the primary concern, ex ante, is on the minimization of the potential loss of life and property, damage to infrastructure, and ensuring continuity in the functionality of public and private services. In the higher frequency, lower impact, geohazards, such as landslides, flash floods, and rockfall, proper planning remains vital, but is often overlooked in transition and developing economies. In the transport sector, proper planning for this category of geohazards can realize significant
savings in construction costs, avoiding cost over-runs, repair costs and costly delays, and subsequent maintenance costs.

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Climate risk and business: Ports

IFC
April 2011

Physical infrastructure at ports and port activities may be highly vulnerable to changes in climate. For instance, the risks could manifest through changes in the level or patterns of shipping, increased flooding affecting movements within ports and causing damage to goods stored, reduced navigability of access channels and business interruption. Some ports will also see opportunities as a result of climate change. A port’s reputation for reliability is key to its success, so ports that are more resilient to disruption from climate events should fare better. Changes in trade flows driven by climate change will also see winners and losers. To understand the significance of these risks for a given port, this study assesses risks and opportunities for ports in general, and specifically for IFC’s client, Terminal Marítimo Muelles el Bosque (MEB), in Cartagena, Colombia.

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Border management modernization

Editors: Gerard McLinden, Enrique Fanta, David Widdowson and Tom Doyle
World Bank
2011

This book provides border management policymakers and reformers with a broad survey of key developments in and principles for improving trade facilitation through better border management, including practical advice on particular issues. In contrast to the traditional border management reform agenda, with its focus on improving customs operations, this book addresses both customs reform and areas well beyond customs-a significant broadening of scope. The book thus presents a new, more comprehensive approach to trade facilitation through border management reform: an approach that embraces a much wider, 'whole of government' perspective.

The objective of this book is to summarize and provide guidance on what constitutes good practices in border management looking beyond customs clearance. The contributions to the volume make clear that there are no simple or universally applicable solutions. Instead, the aim is to provide a range of general guidelines that can be used to better understand the complex border management environment and the interdependencies and interrelationships that collectively need to be addressed to secure meaningful change and improvement.

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Guía para decisores: Externalidades de proyectos de infraestructura urbana

CEPAL
GTZ
Documentos de proyectos Nº 266
Noviembre 2009

El presente documento es el resultado de una investigación teórica y aplicada respecto del potencial que presentan la identificación, medición y valoración de externalidades urbanas para el crecimiento sostenido de las ciudades. En este sentido, se establece, que los mecanismos e instrumentos de internalización de externalidades son un factor clave para maximizar el potencial que generan las ciudades en términos de mayor habitabilidad y funcionalidad. La incorporación de las externalidades urbanas en el espectro de la planificación y gestión de las ciudades, es producto de la necesidad de crear un entorno urbano que cuente con mayor eficiencia, seguridad, justicia y calidad ambiental.

En la actualidad las ciudades muestran que en la base de sus principales dinámicas de desarrollo, existen procesos económicos de producción, distribución y consumo que generan diversos efectos en el bienestar de las comunidades urbanas. De allí que se justifica enfocar el presente trabajo desde la óptica de la economía urbana, porque en esencia las externalidades son los efectos que generan las decisiones económicas de agentes y actores urbanos, que repercuten en el bienestar de la comunidad urbana en su conjunto.En términos generales, puede decirse que la indagación sobre cómo aprovechar las oportunidades que ofrece el entorno urbano y territorial surge de la insatisfacción creciente que existe sobre los resultados de las intervenciones urbanas, en cuanto a los objetivos más permanentes del desarrollo, ya que ni la competitividad, ni la igualdad de oportunidades, ni la calidad de vida, ni la seguridad se han generalizado en forma significativa, limitándose su éxito a resultados financieros y/o de rédito político. Esta insatisfacción se agudiza por la percepción de que las ciudades pueden y deben generar dicho beneficio, principalmente porque la proporción de población que reside en ciudades sigue aumentando en la Región.Al respecto, una de las manifestaciones en el contexto de la acelerada urbanización en América Latina y el Caribe, es la generación de externalidades producto del desarrollo de grandes proyectos de infraestructura urbana.

Por tanto, para estos efectos externos, se hace necesario tener criterios de valoración del impacto en el medio urbano, así como también, instrumentos de gestión que garanticen una mayor rentabilidad de las inversiones (económica, social y ambiental); que mejoren la funcionalidad de las ciudades.

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Natural Hazards, UnNatural Disasters: The economics of effective prevention

Global Facility for Disaster Reduction and Recovery - GFDRR
World Bank
United Nations
2010

Earthquakes, droughts, floods, and storms are natural hazards, but unnatural disasters are the deaths and damages that result from human acts of omission and commission. Every disaster is unique, but each exposes actions—by individuals and governments at different levels—that, had they been different, would have resulted in fewer deaths and less damage. Prevention is possible, and this book examines what it takes to do this cost-effectively.

Natural Hazards, UnNatural Disasters looks at disasters primarily through an economic lens. Economists emphasize self-interest to explain how people choose the amount of prevention, insurance, and coping. But lenses can distort as well as sharpen images, so the book also draws from other disciplines: psychology to examine how people may misperceive risks, political science to understand voting patterns, and nutrition science to see how stunting in children after a disaster impairs cognitive abilities and productivity as adults much later. It asks not only the tough questions, but some unexpected ones as well: Should all disasters be prevented? Do disasters increase or decrease conflict? Does foreign aid help or hinder prevention? The answers are not obvious. Peering into the future, it finds that growing cities and a changing climate will shape the disaster prevention landscape. While it is cautious about the future, it is not alarmist.

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Una estimación del costo de capital para concesiones en carreteras del Perú

Sandro A. Huamaní Antonio
Cuadernos de Infraestructura e Inclusión Social
Ano I - Nº 4, Lima, Setiembre de 2010
MTC

La determinación del costo de capital tiene relevancia para la toma decisión sobre la inversión en infraestructura de transportes, debido a que determina la rentabilidad requerida por las empresas concesionarias antes de incursionar en nuevos proyectos o en adelantos de inversiones. Por otro lado, dicho costo es importante para el Concedente, pues determina directa o indirectamente –en el caso de no ser una obra autofinanciada- el monto de cofinanciamiento de las obras. Por tal razón, en este documento de trabajo se calcula el costo del capital para diferentes empresas concesionarias en carreteras del Perú, para tal propósito, la literatura empírica y los analistas financieros frecuentemente usan la metodología del CAPM (Capital Asset Pricing Model), cuyo esquema es basado en el enfoque Media - Varianza de la Teoría de Incertidumbre y desarrollados en los artículos de Sharpe (1964), Lintner (1965) y Mossin (1966).

Con el objetivo de determinar el costo del capital, el siguiente documento se estructura de la siguiente manera: (i) Primero, se hace una revisión breve de los fundamentos Teóricos de la metodología CAPM basado en el enfoque Media – Varianza y la Teoría de Portafolio de Markowitz. (ii) En segundo lugar, se realiza una descripción en forma general de las concesiones en el Perú. (iii) Por último, se realiza una estimación del costo del capital mediante el modelo del CAPM para algunas concesiones en carreteras del Perú, donde se estiman los componentes del modelo CAPM, la cuales son: la tasa libre de riesgo el riesgo sistemático, la prima de riesgo y el riesgo país.

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A Systems Approach to Risk Reduction of Transportation Infrastructure Networks Subject to Multiple Hazards

Mauricio Sanchez-Silva and David V. Rosowsky
University Transportation Center for Mobility
December 2008

In this project, researchers developed a model transportation infrastructure network that can be used to design efficient risk management strategies that ensure acceptable system performance (e.g., in terms of expected damage or recovery times) when subject to individual, simultaneous, or sequential threats, either natural or man-made. This study explores the performance of infrastructure networks using a systems approach; that is, networks will not be traditionally modeled as a collection of separate elements, but rather as a dynamically interacting whole. This project develops new analytical methods built on a hierarchical structure of the system that focuses on the interaction and dependencies between components. These methods are used to characterize and model the emergent properties of the entire system. This project integrates analysis of network performance with that of individual network components. The transportation network of Texas is used as an illustrative example of some parts of the model.

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Three perspectives to global projects: Managing risks in multicultural project networks

VTT RESEARCH NOTES 2461
VTT
2009

Global projects represent an extremely challenging form of project work, especially in the sense that despite the best efforts for planning and prediction, the complexity of the project network and the fact that the operations usually take place on foreign soil with foreign partners are likely to cause many unpredictable and unexpected events and deviations from project plans, having a significant impact on the project progress. The purpose of this study is to identify and analyse interactions between cultural processes, network connections and risk management practices in global delivery projects. During the research, data has been collected from 21 case projects delivered to 17 countries world-wide. The studied projects varied in size, the degree of success and cultural diversity. The data consists of 92 interviews with the project managers and other project specific key personnel from four project-based companies as well as project documentation. The interviews have been conducted both in Finland and in various project host countries. The examination of the case projects is implemented both as project specific and comparative case studies. By the project specific historical studies, the project trajectories and critical incidents have been described as well as explanations for the project specific outcomes in general have been sought for. In addition, the comparative research designs have been built according to the planned and emergent outcomes of the projects as well as according to their cultural diversity and institutional characteristics. By the comparisons, novel ways to unravel the risks and difficulties of the project management due to the cultural differences have been sought for. The results of this study inevitably present the significant impact of the various project stakeholders and the emerging cultural diversity on the project risk management processes required for answering the specific needs and challenges of global projects.

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Global Determinants of Stress and Risk in Public-Private Partnerships (PPP) in Infrastructure

Asian Development Bank Institute
March 2009

This study analyzes the determinants of stress in public-private partnerships (PPPs) in infrastructure investment. While project failures seldom occur, there are many stresses that hinder success. One of these is broad political risk: the prerogative of government executives to make sweeping changes in investment rules or regulations—through measures such as protracted tariff freezing—that undermine a project’s market value. Broad political risk can constitute the biggest threat to project outcomes. However, this is usually only realized after other risks, such as currency risk, have materialized first. Thus, broad political risk can be controlled.

The empirical analysis in this study yields a number of surprising results: (i) strong growth and rigid currency regimes heighten risk by leading to adverse selection of proponents and moral hazard in project design; (ii) many of the World Bank’s indices of governance quality lead to perverse outcomes, suggesting that new governance standards must be used to judge PPPs; and (iii) except for political risk guarantees, loans and equity from multilateral institutions have no effect on outcomes; however, political risk guarantees are rarely utilized, suggesting that they may need to be redesigned or marketed better to be more useful. The paper concludes with suggestions for policy improvements.

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