Mastering the Risky Business of Public-Private Partnerships in Infrastructure

By Manal Fouad, Chishiro Matsumoto, Rui Monteiro, Isabel Rial, Ozlem Aydin

May 10, 2021

Preview Citation

Format: Chicago

Manal Fouad, Chishiro Matsumoto, Rui Monteiro, Isabel Rial, and Ozlem Aydin. Mastering the Risky Business of Public-Private Partnerships in Infrastructure, (USA: International Monetary Fund, 2021) accessed November 21, 2024

Disclaimer: The views expressed herein are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Investment in infrastructure can be a driving force of the economic recovery in the aftermath of the COVID-19 pandemic in the context of shrinking fiscal space. Public-private partnerships (PPP) bring a promise of efficiency when carefully designed and managed, to avoid creating unnecessary fiscal risks. But fiscal illusions prevent an understanding the sources of fiscal risks, which arise in all infrastructure projects, and that in PPPs present specific characteristics that need to be addressed. PPP contracts are also affected by implicit fiscal risks when they are poorly designed, particularly when a government signs a PPP contract for a project with no financial sustainability. This paper reviews the advantages and inconveniences of PPPs, discusses the fiscal illusions affecting them, identifies a diversity of fiscal risks, and presents the essentials of PPP fiscal risk management.

Subject: Expenditure, Fiscal risks, Infrastructure, National accounts, Public financial management (PFM), Public investment and public-private partnerships (PPP), Public investment spending, Risks of public-private partnership

Keywords: Africa, Fiscal risks, Infrastructure, Infrastructure governance, PPP contract, PPP procurement, PPP project, PPPS liability, Public investment, Public investment and public-private partnerships (PPP), Public investment spending, Public-private partnerships, Recognition criteria, Risks of public-private partnership

Publication Details

Pages:

61
Volume:

---
DOI:

---
Issue:

---
Series:

Departmental Paper No 2021/010
Stock No:

MRBPPPIEA
ISBN:

9781513576565
ISSN:

2616-5333

FACTSHEETS

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

Departmental Papers