What is the history of P3s?
When procuring highway projects, governments generally have two options for underwriting capital expenditures: tax revenues or user fees. The tax-based approach has traditionally been favored in the United States, Northern Europe and Japan, and involves using general tax revenues, earmarked fuel taxes or other dedicated taxes to pay for projects. Southern European nations such as France, Italy, Portugal, and Spain – together with many developing nations – have favored the use of user fees collected in the form of tolls to finance their infrastructure needs. Transportation P3s were pioneered in Europe and by the 1990s, two types of partnership approaches had evolved. Under the more common “real toll” scenario, private concessionaires arrange financing, construct roadways, maintain them, service their debt, and derive revenue from tolls collected directly from motorists. One of the main benefits of the “real toll” concession approach is that it enables governments to tap into sources of
