PPP Resources for

Road Transport
Peter Roberts
Lead Infrastructure Specialist
Natalya Stankevich
Consultant
TUDTR
Public / Private Partnerships in Highways
October 6, 2005

Thematic
Resources

Public and Private Sector Roles in

Transport - Overview
Amos, P. 2004. Public and Private Sector Roles in the
Supply of Transport Infrastructure and Services.
TP-1. WB.
Aim at greater efficiency through competition
Emphasise the need for effective regulation
Recognise scope for governance arrangements

Estache, A. and Serebrisky, T. 2004. Where Do We

Stand on Transport Infrastructure Deregulation and
Public-Private Partnerships.
Wang, E.C. 2005. Mechanisms for Effective
Deployment of the Private Sector in Transport
Services in Infrastructure. (IEF. Unpublished).

Laws, Rules and Contracts

EBRD. 2004. "Concession Assessment Project".

Cover Analysis Report. London.
An overview of legal status

Guasch, J. Luis. 2004. Granting and

Renegotiating Infrastructure Concessions Doing
It Right. WBI.
Kessides, Ioannis N.; Reforming Infrastructure Privatization, Regulation; and Competition World
Bank Policy Research Report World Bank and
Oxford University Press.

Good Governance and Reducing

Corruption in Concessions

Queiroz, C. and Visser, A. 2001. "Corruption,

Transport Infrastructure Stock and Economic
Development."
The Business Principles for Countering Bribery, by
Transparency International and Social
Accountability International.

Hodges, J. 2003. Unsolicited Proposals Competitive Solutions for Private Infrastructure.

Hodges, J. 2003. Unsolicited Proposals - The

Issues for Private Infrastructure Projects.

Transparency International
Special Focus:
Corruption in
Construction
and PostConflict
Reconstruction

Transparency International
Global Corruption Report, 2005
The report opens with a tribute to one individual,
Satyendra Dubey, who was murdered after he
courageously spoke out against corruption in the
construction of a massive highway project in
India.
See Part 1 Corruption in Construction
Too often, international investors and financial
institutions are also culpable in supporting
corruption. An over-readiness to lend against a
background of weak oversight and accounting
safeguards has led the World Bank and regional
development banks to invest heavily in projects
that have been subject to allegations of
corruption.

PPPs and Fiscal Risks

HM Treasury. Value for Money Appraisal

Guidance. London.
Carruthers, R. and Basu, R. 2005. The
Theoretical and Practical Bases for Setting Road
Tolls. The World Bank., Washington, D.C.:
(TUDTR. Unpublished)
Silva, G. F. 2000. Toll Roads: Recent Trends in
Private Participation.
Irwin, T. Government Guarantees for Private
Infrastructure. (IEF. Unpublished).

Regional
Experience
with Highway
PPP Projects

Europe and Central Asia

WB ECA Transport Website

Queiroz, C. 2005. Launching Public Private Partnerships

for Highways in Transition Economies. TP-9. World Bank.

PricewaterhouseCoopers. 2004. Developing Public Private

Partnerships in New Europe.

Eijbergen, B. L. J. 2005. Potential for Public Private

Partnerships in the Provision of Transport Infrastructure
and Services Within the Russian Federation. Draft
Discussion Paper.
World Bank. 2005. A Strategy for Private Sector
Participation in Russias Infrastructure Industries. ECSIE.
Unpublished.
EC. 2004. Resource Book on PPP Case Studies. Brussels.

East and South Asia

Bellier, M. and Zhou, Y. M. 2003.

Private Participation in Infrastructure in
China. Issues and Recommendations
for the Road, Water, and Power Sector.
Washington, D.C.: World Bank and
International Finance Corporation.
Progress with Private Sector
Participation. World Bank and Highway
Sector Financing in India Website.

Latin America and the Caribbean

Lorenzen, C.C., and Barrientos, M.E.

2001. Toll Road Concessions: The
Chilean Experience. Private Finance and
Guarantees Discussion Paper Series, No.
124. Washington, D.C.: World Bank.
Engel, E., Fischer, R., and Galetovic, A.
2003. Privatizing Highways in Latin
America: Is It Possible to Fix What Went
Wrong? Yale University.

Africa

WB SSATP Website
Cadwalader, Wickersham and Taft LLP. The Long and Winding
Road Highway Concessions in Sub-Saharan Africa. London.

WB and PPIAF. 2004. Private Solutions for Infrastructure in

Lesotho.
WB and PPIAF. 2005. Private Solutions for Infrastructure in
Angola.

Department of Transport, South Africa

South African National Roads Agency

Transnet, South Africa

Additional Sources

WB/PPIAF Toolkit for PPP in Highways

Private Participation in Infrastructure

Project Database

World Bank Guarantees Website

Operational Policy on World Bank Guarantee

Program, OP 14.25

MIGA Infrastructure Website

European Commission. 2003. Guidelines

for Successful PPPs. EC. DirectorateGeneral Regional Policy. Brussels.

Financial Resources For

Road Networks

All road transport networks are PPPs

Regulation is a Public interest
Road Networks mostly Public investment

Some sections Privately owned (eg Toll Roads)

Maintenance may be Private concession

Transport Operations are Private

investments

Transport Operations Cost

Transport operating costs are much more than road asset

provision and management costs
Transport costs increase disproportionately (typically 3 fold)
with road deterioration as a result of inadequate maintenance
Road deterioration increases disproportionately with the
overloading of heavy vehicles
Increasing proportion of informal services is difficult to regulate
particularly in low-income countries where institutions are
poorly developed.
Excess costs (direct and indirect) from sub-optimal
management of transport services are often very high (e.g.
road accidents)

ROAD TRANSPORT - INFRASTRUCTURE

EXPENDITURE

30

Annual Expenditure / capita

25

Road network

20

15

10

Benin

B. Faso

Kenya

Morocco

Senegal

S. Africa

Swaziland

Tanzania

Pakistan

ROAD TRANSPORT - FORMAL EXPENDITURE

300

Road freight

Annual Expenditure/capita

250

Pas'ger transport
Road network

200

150

100

50

Benin

B. Faso

Kenya

Morocco

Senegal

S. Africa

Swaziland

Tanzania

Pakistan

Transport Costs Dominate

Costs of road transport operations are typically

5-15 times the cost of providing and maintaining
the road network infrastructure in LICs and
MICs

In more active economies the proportion of

transport operations costs is even greater:
Studies in Indonesia have shown annual expenditure
for road transport operation to be about 20 times
expenditure on the roads.

Total Road Transport Costs

Indonesia case
annual costs Rupiah trillion (1999/00)

Public expenditure: National, Provincial and

District roads:
Rp tr % GNI
Capital: new construction etc:
2.7 )
Recurrent: maintenance etc: 3.0 ) < 1

User expenditure:
vehicle ownership, operation etc:

185

> 14

(Gross National Income: approx.Rp 1,280 tr)

Inclusive, Affordable, Sustainable

Transport Services

Rural Access: affordable basic transport

reaching the rural poor

Urban Mobility: effective urban

transport services are inclusive and

affordable

Road Haulage: local and national

freight services are effective, competitive

and environmentally sustainable

Managing the Network Effectively

Key inputs to optimise Transport Costs are:
road maintenance and
demand management
congestion / overloading / accidents

Road users should have more control

Institutionally possible but political resistance

Carbon Funds may give financial incentive

require reliable measurements of performance for
monitoring

Further Resources and Gaps

Road network management:

Gwilliam, Ken and Ajay Kumar. 2002. Road Funds

Revisited. A Preliminary Appraisal of the Effectiveness of
Second Generation Road Funds. Washington, D.C.:
World Bank. TWU Series, TWU-47
Public and Private Financing of Transport: Review of
World Bank Assistance: Background Paper: Evaluation of
Bank Support for Road Funds (OED. Work in progress)

Passenger services:

Safe Provision for Pedestrians and Non-motorised

Transport (various).
Targeted, Competitively-bid Subsidies for the Delivery of
Rural and Urban Transport Services Output Based Aid
in Transport (TUDTR and IEF. Work in progress)

Further Resources More Gaps

Freight services:

Hine, J.L. and Rizet, C. A comparison of the Costs and

Productivity of Road Transport in Africa and Pakistan.
Transport Reviews. Vol. 13 no 2, 1993
???

Environmental costs:

Metschies, G. "International Fuel Prices 2005. GTZ.

Gwilliam, K., Kojima, M., and Johnson, T. Reducing Air
Pollution from Urban Transport. June, 2004.
Washington, D.C.: World Bank .
Climate Change, Energy and Sustainable Development,
G8 Gleneagles 2005
Masaki, S. and Roberts, P. Key Environmental
Indicators for Transport. (TUDTR. Work in progress)

Questions?
Sources and Links
follow >>>

Web Links to PPP Resources

In The World Bank and Elsewhere
Role of the Public and Private Sector in Transport Infrastructure

Amos, Paul. 2004. Public and Private Sector Roles in the Supply of
Transport Infrastructure and Services: Operational Guidance for
World Bank Staff. World Bank Transport Paper No. 1. Washington,
D.C.: The World Bank.
http://siteresources.worldbank.org/INTTRANSPORT/2145781099319223335/20273720/tp-1_pp-roles.pdf
International Experience with Highway PPP Projects; Main Lessons
for Success

Cadwalader, Wickersham and Taft LLP. The Long and Winding Road
Highway Concessions in Sub-Saharan Africa. London.
http://www.cadwalader.com/assets/client_friend/100104LongWinding.pd
f
WB and PPIAF. 2004. Private Solutions for Infrastructure in
Lesotho. A Country Framework Report. Washington, D.C. World
Bank and PPIAF.
http://wbln0018.worldbank.org/ppiaf/activity.nsf/files/FinalLesothoCFR.p
df/$FILE/FinalLesothoCFR.pdf

WB and PPIAF. 2005. Private Solutions for Infrastructure

in Angola. A Country Framework Report. Washington,
D.C. World Bank and PPIAF.
http://wbln0018.worldbank.org/ppiaf/activity.nsf/files/AngolaC
FR.pdf/$FILE/AngolaCFR.pdf

WB and PPIAF. 2005. Private Solutions for Infrastructure

in Rwanda. A Country Framework Report. Washington,
D.C. World Bank and PPIAF.
http://wbln0018.worldbank.org/ppiaf/activity.nsf/files/Rwanda
%20CFR.pdf/$FILE/Rwanda%20CFR.pdf

Department of Transport, South Africa

http://www.transport.gov.za/

South African National Roads Agency

http://www.nra.co.za/
Transnet South Africas passenger and freight transport
operations
http://www.transnet.co.za/
European Commission. 2004. Resource Book on PPP Case
Studies. Brussels.
http://europa.eu.int/comm/regional_policy/sources/docgener/g
uides/pppresourcebook.pdf

Queiroz, C. 2005. Launching Public Private Partnerships for

Highways in Transition Economies. TP-9. Washington, D.C.:
World Bank.
http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTTRANS
PORT/0,,contentMDK:20457516~pagePK:148956~piPK:216618~
theSitePK:337116,00.html
Eijbergen, B. L. J. 2005. Potential for Public Private
Partnerships in the Provision of Transport Infrastructure
and Services Within the Russian Federation. Washington,
D.C.: World Bank, Draft Discussion Paper, January 2005.

World Bank. 2005. A Strategy for Private Sector Participation in

Russias Infrastructure Industries. ECSIE. Unpublished.
PricewaterhouseCoopers. 2004. Developing Public Private
Partnerships in New Europe.
http://www.pwcglobal.com/ie/eng/about/svcs/corp_finance/pwc_
ppp04.pdf
European Commission. 2004. Resource Book on PPP Case
Studies. Brussels.
http://europa.eu.int/comm/regional_policy/sources/docgener/gui
des/pppresourcebook.pdf

European Commission. 2003. Guidelines for Successful

Public-Private Partnerships. European Commission.
Directorate-General Regional Policy. Brussels.
http://europa.eu.int/comm/regional_policy/sources/docgener/g
uides/ppp_en.pdf
Bellier, M. and Zhou, Y. M. 2003. Private Participation in
Infrastructure in China. Issues and Recommendations
for the Road, Water, and Power Sector. Washington, D.C.:
World Bank and International Finance Corporation.
Progress with Private Sector Participation. World Bank
and Highway Sector Financing in India Website:
http://www.highwayfinindia.org/psp_indian_national.htm
Lorenzen, C.C., and Barrientos, M.E. 2001. Toll Road
Concessions: The Chilean Experience. Private Finance and
Guarantees Discussion Paper Series, No. 124. Washington,
D.C.: World Bank.
http://siteresources.worldbank.org/INTGUARANTEES/Resource
s/TollRoads_Concessions.pdf
Engel, E., Fischer, R., and Galetovic, A. 2003. Privatizing
Highways in Latin America: Is It Possible to Fix What
Went Wrong? Yale University. Economic Growth Center.
http://www.econ.yale.edu/growth_pdf/cdp866.pdf

Silva, G. F. 2000. Toll Roads: Recent Trends in Private

Participation. Washington, D.C.: World Bank.
http://rru.worldbank.org/Documents/PublicPolicyJournal/224Sil
va-1211.pdf
Wang, E.C. 2005. Mechanisms for Effective Deployment
of the Private Sector in Transport Services in
Infrastructure. Washington, D.C.: World Bank. Unpublished.

Laws, Rules and Contracts

EBRD. 2004. "Concession Assessment Project". Cover

Analysis Report, prepared by Gide Loyrette Nouel for European
Bank for Reconstruction and Development. London.
http://www.ebrd.com/country/sector/law/concess/assess/repor
t.pdf
Guasch, J. Luis. 2004. Granting and Renegotiating
Infrastructure Concessions Doing It Right. World Bank
Institute Development Studies. Washington, D.C.: World Bank.
http://wwwwds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2004/
05/06/000090341_20040506150118/Rendered/PDF/288160PA
PER0Granting010renegotiating.pdf

WB PPIAF. 2004. Labor Issues in Infrastructure

Reform.
http://www.ppiaf.org/Reports/LaborToolkit/Toolkit/ or
http://rru.worldbank.org/Toolkits/Labor/Download.aspx

Competitive Selection of Concessionaires

World Bank. 2004. Procurement Under IBRD Loans

and IDA Credits. Guidelines. Washington, D.C.
http://siteresources.worldbank.org/INTPROCUREMENT/Res
ources/Procurement-May-2004.pdf
Kerf, Michel, et.al. 1998. Concessions for
Infrastructure: A Guide to Their Design and Award.
World Bank Technical Paper No. 399. Washington, D.C.:
World Bank.
http://rru.worldbank.org/Documents/Toolkits/concessions_f
ulltoolkit.pdf

Good Governance and Reducing Corruption in Highways Concessions

Queiroz, C. and Visser, A. 2001. "Corruption, Transport

Infrastructure Stock and Economic Development."
Infrastructure and Poverty Briefing for the World Bank
Infrastructure Forum, CD-ROM. World Markets Research Centre
Ltd. Washington, D.C.: World Bank.
http://www2.udec.cl/~provial/expo/WB%20Infrast%20Forum%2
0May%202001%20TranspInfra&Corrup%20CQ%20AV.pdf
Transparency International. 2005. Granting a Concession for
the Trakia Motorway: Interim Report. Sofia, Bulgaria.
http://www.transparency-bg.org/?magic=0.5.71.2
Transparency International and Social Accountability
International. 2005. The Business Principles for Countering
Bribery. Framework for the Development of an Effective
Anti-Corruption Policy.
http://www.transparency.org/building_coalitions/private_sector/b
usiness_principles.html
Transparency International. 2005. Corruption in
Construction. From Global Corruption Report. Special
Focus: Corruption in Construction and Post-Conflict
Reconstruction.
http://www.globalcorruptionreport.org/gcr2005/download.html

PPP and Public Policy Requirements

Estache, A. and Serebrisky, T. 2004. Where Do We Stand on

Transport Infrastructure Deregulation and Public-Private
Partnerships. Washington, D.C.: World Bank.

Dealing with Unsolicited Proposals

Hodges, J. 2003. Unsolicited Proposals - Competitive

Solutions for Private Infrastructure. Public Policy for the
Private Sector, Note No 258. Washington, D.C.: World Bank.
http://rru.worldbank.org/Documents/PublicPolicyJournal/258Hod
ge-031103.pdf
Hodges, J. 2003. Unsolicited Proposals - The Issues for
Private Infrastructure Projects. Public Policy for the Private
Sector, Note No 257. Washington, D.C.: World Bank.
http://rru.worldbank.org/Documents/PublicPolicyJournal/257Hod
ge-031103.pdf

PPPs and Fiscal Risks

Irwin, T. Government Guarantees for Private

Infrastructure. (IEF. Unpublished).
HM Treasury. Value for Money Appraisal Guidance.
London. http://www.hmtreasury.gov.uk/documents/public_private_partnerships/ke
y_documents/ppp_keydocs_vfm.cfm
Carruthers, R. and Basu, R. 2005. The Theoretical and
Practical Bases for Setting Road Tolls. Washington,
D.C.: World Bank. (TUDTR. Unpublished).

Other PPP Resources

World Bank/PPIAF Toolkit for PPP in Highways.

http://rru.worldbank.org/Documents/Toolkits/Highways/sta
rt.HTM
Private Participation in Infrastructure Project Database
http://ppi.worldbank.org/

World Bank Knowledge Services for Private Sector Development

Website. http://rru.worldbank.org/

Public / Private Infrastructure Assistance Facility (PPIAF)

http://ppiaf.org/index.htm
World Bank Guarantee Program Web site:
http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/EXTFIN
INSTRUMENTS/EXTGUARANTEES/0,,contentMDK:20267847~hlPK
:545970~menuPK:64143502~pagePK:64143534~piPK:6414344
8~theSitePK:411474,00.html
The World Bank Guarantees. Leveraging Private Finance For
Emerging Markets. Private Participation and Finance Department.
Infrastructure Vice Presidency.
http://intresources.worldbank.org/INTCOUNTECONOMICS/Resour
ces/Newguaranteesbrochurejanuary2002.pdf
World Bank Operational Policy on Its Guarantee Program, OP
14.25:
http://wbln0018.worldbank.org/institutional/manuals/opmanual.n
sf/toc1/A505EC4B4C9EB1658525672C007D0976?OpenDocument
MIGA Infrastructure Web site:
http://www.miga.org/sitelevel2/level2.cfm?id=1074