Spanish toll road PPPs in financial distress: lessons learnt from the strategic behavior of the stakeholders

Resumen

The Spanish government has extensive experience in promoting toll highways through public–private partnerships (PPPs). In 2013, several concessions filed for bankruptcy after years of financial distress. Given the imminent termination of the contracts, the government, the PPP contractors, and the financial institutions positioned themselves strategically and adopted different measures to safeguard their own interests. This chapter presents the causes that motivated the bankruptcy of contracts and the shortcomings of the legal framework regulating their early termination. It also studies the strategical behavior of the different stakeholders involved with the aim of explaining the ultimate outcome of the negotiation process. From this case study, we provide a set of lessons that can be potentially applicable to other experiences in some areas: first, on the suitability of the PPP model; second, on the most effective way to negotiate the termination of contracts; and third, on the right way of designing termination clauses in PPP contracts with the aim of safeguarding the good service to the user while, at the same time, avoiding opportunistic behavior.