Financing transport infrastrucure projects in Italy: a critical analysis of the main approaches

Laurino, Antonio and Beria, Paolo and Grimaldi, Raffaele (2010): Financing transport infrastrucure projects in Italy: a critical analysis of the main approaches. Published in: General Proceedings of the 12th World Conference on Transport Research Society

Abstract

This paper aims at analysing the methodology used for financing large infrastructure projects in Italy. In particular, it focuses on the Italian highway sector, where in the last years many projects have been launched using new financial instruments. The paper discusses three of these “instruments”. The first one is the Project Financing, discussed starting from a general review, analyzing also the different typologies used, the risks involved and their allocation among the various subjects that take part in the PF mechanism. A special case concerns the recently introduced model used for the Italian highways, known as “PF with takeover compensation”. There are two other important mechanisms used for financing infrastructure projects in Italy: the exploitation of road demand rigidity and the spreading of the investment over the entire network, favouring larger concessions. We conclude that all these three mechanisms present deep flaws in terms of transparency and of contradiction with economic feasibility criteria (that have to dominate the public investment rationale).

• Item Type: MPRA Paper
• Language: English
• Keywords: transport; investment; infrastructure; project financing; highway.
• Subjects: H - Public Economics > H5 - National Government Expenditures and Related Policies > H54 - Infrastructures ; Other Public Investment and Capital Stock; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy; L - Industrial Organization > L4 - Antitrust Issues and Policies > L43 - Legal Monopolies and Regulation or Deregulation; L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L33 - Comparison of Public and Private Enterprises and Nonprofit Institutions ; Privatization ; Contracting Out

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