Abstract for: The Unexplored Loop in Public-Private Partnerships: The implications of “Reconcession” in National PPP Programs
Multiple countries have promoted PPP programs to deliver multiple PPPs under specific institutional and regulatory frameworks for closing the infrastructure gap. Ideally, once the concession period finishes, the infrastructure should be transferred back to the public sector. However, governments and former concessionaires are prompt to seek a “reconcession” by rebidding the PPP, resulting in transforming PPPs' intended meaning from temporal agreements to permanent public infrastructure and services privatization. Despite the significant attention previously devoted to analyzing national and regional PPP programs, the implications of reconcession have not been considered yet at the PPP program level. This study develops a system dynamics model to examine the implications of reconcession in user-pay PPP programs. This model challenges the traditional archetypes that consider PPP programs as a linear series of stocks by introducing an unprecedented reinforcing feedback loop of PPP projects that are reconcessioned periodically. Furthermore, the model's reliability was tested based on a national toll road PPP program including more than 80 projects in a 30-years period. The policy analysis identifies the most critical parameters required in the long-term for sustaining national PPP programs: demand risk, macroeconomic fluctuations, and introduces alternatives to reduce the public deficit derived from PPP national programs.