Improving the Payment Mechanism in Transport Public–Private Partnerships

Sánchez Soliño, Antonio and Alcaraz Carrillo de Albornoz, Vicente (2019). Improving the Payment Mechanism in Transport Public–Private Partnerships. "Public Money & Management" ; p. 1. ISSN 1467-9302. https://doi.org/10.1080/09540962.2019.1684013.

Description

Title: Improving the Payment Mechanism in Transport Public–Private Partnerships
Author/s:
  • Sánchez Soliño, Antonio
  • Alcaraz Carrillo de Albornoz, Vicente
Item Type: Article
Título de Revista/Publicación: Public Money & Management
Date: 28 October 2019
ISSN: 1467-9302
Subjects:
Freetext Keywords: Demand Risk, Incentive, Performance, Public–Private Partnership (PPP), Public Procurement
Faculty: E.T.S.I. Caminos, Canales y Puertos (UPM)
Department: Ingeniería Civil: Construcción
Creative Commons Licenses: Recognition - No derivative works - Non commercial

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Abstract

Based on agency theory, this paper shows that the payment mechanism in a transport public–private partnership (PPP) should generally combine a fixed payment to the contractor, a payment based on service quality and a payment relating to the number of users. The transfer of demand risk can be totally excluded only if the public authority can define and verify a series of indicators that cover all the performance dimensions of the service. The payment mechanism in transport PPPs is a key element of the contracts, since it defines the system of incentives and risks transferred to the contractor. Starting from the idea that incentives and risks are closely related to each other, this paper addresses the problem of transfering demand and performance risks. The authors assume that the public authority sets the parameters of the payment mechanism included in the contract in order to maximize social benefit. As a result, this paper establishes the general principles for an optimal payment mechanism in PPP contracts.

Funding Projects

TypeCodeAcronymLeaderTitle
Government of SpainTRA2015-64723-RUnspecifiedUnspecifiedGestión eficiente y sostenible de la demanda de transporte en corredores con problemas de congestión mediante el uso de las TIC y la tarificación dinámica

More information

Item ID: 64487
DC Identifier: http://oa.upm.es/64487/
OAI Identifier: oai:oa.upm.es:64487
DOI: 10.1080/09540962.2019.1684013
Official URL: https://www.tandfonline.com/doi/full/10.1080/09540962.2019.1684013
Deposited by: Memoria Investigacion
Deposited on: 09 Oct 2020 17:13
Last Modified: 13 Oct 2020 06:44
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