Where Do We Stand on Transport Infrastructure Deregulation and Public-Private Partnership?

The evolution of transport public-private partnerships (PPPs) in industrial and developing countries since the early 1990s seems to be following a similar path: private initiatives work for a while, but after a shock to the sector takes place, the public sector returns as regulator, owner, or financier. After a while the public sector runs into problems and eventually finds a hybrid solution to ensure the survival of the sector. Estache and Serebrisky review the effectiveness of transport infrastructure deregulation from three angles: efficiency, fiscal, and users' viewpoint. They emphasize the difficulties and strong political commitments required to make the reforms sustainable and argue that governments willing to make corrections to the reform path are faced with the need to address recurrent and emerging issues in transport systems: tariff structure, quality (timetable, safety, and environment), access rules for captive shippers, the trend toward rebundling and decrease in intrasectoral competition, multimodalism, and the stimulus through yardstick competition. This paper - a product of the Finance and Private Sector Development Division, World Bank Institute - is part of a larger effort in the institute to increase the understanding of infrastructure regulation.

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