Document details

The Portuguese shadow toll concessions : analysis of allocation and valuation

Author(s): Camuamba, Elsa Natália Hilário

Date: 2012

Persistent ID:

Origin: Veritati - Repositório Institucional da Universidade Católica Portuguesa

Subject(s): Risk allocation; Risk valuation; Value for Money; NPV-at-risk


As more countries are relying on the private sector for provision of public services, Public-Private Partnerships (PPPs) are at the center of this growing trend. Optimal risk allocation through risk transfer to the private sector is the critical issue for the success of these partnerships in achieving best value-for-money (VfM) for the public sector. Using the Portuguese shadow toll concessions (SCUT), this study aims to analyze and evaluate their allocation of risk between the public and private sectors. Accordingly, the first part of the paper examines how risks in the SCUT concessions were allocated. Our analysis indicates that for the most part, with the exception of demand risk, risks were well allocated. The second part of the paper identifies and evaluates the main risks transferred to the private sector. It also goes further in assessing gains before and after risk transfer, if any, to the private sector. We find that risks transferred to the private sector account for a very small share of public sector payments. This paper also concludes that the costs to the public sector, through the payment obligations, far outweigh those assumed by the private sector. Consequently, this paper examines whether the SCUT concessions were successful in regards to achieving VfM. The high gains to the private sector may suggest otherwise. However, given that there was no comparison of VfM between the PPP approach and an alternative procurement route, it is not possible to draw any concrete conclusions.

Document Type Master thesis
Language English
Advisor(s) Reis, Ricardo Ferreira; Sarmento, Joaquim Miranda
Contributor(s) Camuamba, Elsa Natália Hilário
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