Description: What Drives Private Sector Exit from Infrastructure? Economic Crises and Other Factors in the Cancellation of Private Infrastructure Projects in Developing Countries

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What Drives Private Sector Exit from Infrastructure? Economic Crises and Other Factors in the Cancellation of Private Infrastructure Projects in Developing Countries

The private sector exits only a fraction of private infrastructure projects before the contract ends. Yet such cancellations can have a sustained impact on a country's program of public-private partnerships, reducing the private sector's...

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Bibliographic Details
Main Authors:	Harris, Clive, Pratap, Kumar V.
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	AIRPORTS CONCESSION PERIOD CONTRACT PERIOD CONTRACT TERMINATION DEPRECIATION DRIVING ELECTRIC UTILITIES FINANCIAL BURDEN FIRMS FOREIGN SPONSORS INCOME INSTITUTIONAL QUALITY INVESTMENT IN INFRASTRUCTURE INVESTMENT IN INFRASTRUCTURE PROJECTS LOCAL GOVERNMENT LOCAL GOVERNMENTS LOCAL SPONSORS MUNICIPALITIES NONGOVERNMENTAL ORGANIZATIONS POLITICAL ECONOMY PRIVATE COMPANY PRIVATE INFRASTRUCTURE PRIVATE INTERESTS PRIVATE PARTNERSHIP PROPERTY RIGHTS PUBLIC PUBLIC POLICY PUBLIC SECTOR PUBLIC-PRIVATE PARTNERSHIPS QUALITY OF SERVICE RAILWAYS ROAD PROJECTS ROADS SEWERAGE SECTOR SEWERAGE TREATMENT TECHNICAL ASSISTANCE TOLL TOLL ROAD TRANSPORT TRUE UTILITIES WALKING WATER PROJECTS WATER SECTOR WATER SUPPLY WATER TREATMENT WATER TREATMENT PLANTS
Online Access:	http://documents.worldbank.org/curated/en/2009/03/10378993/drives-private-sector-exit-infrastructure-economic-crises-other-factors-cancellation-private-infrastructure-projects-developing-countries http://hdl.handle.net/10986/10569

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Summary:	The private sector exits only a fraction of private infrastructure projects before the contract ends. Yet such cancellations can have a sustained impact on a country's program of public-private partnerships, reducing the private sector's confidence in the government's commitment as well as the government's confidence in the robustness and "value for money" of these arrangements. Econometric analysis shows that macroeconomic shocks nearly double the cancellation rate. As today's global financial crisis greatly increases the cost, and reduces the availability, of project financing, the number of cancellations could grow. That would have implications for the role public-private partnerships can play in meeting the infrastructure needs of developing countries.