PPP Distress and Fiscal Contingent Liabilities in South Asia
Since the early 1990s, public-private partnerships (PPPs) in infrastructure provision have been expanding around the world and in South Asia. Well-structured PPPs can unleash efficiency gains in the provision of infrastructure. But PPPs create liab...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English English |
| Published: |
World Bank, Washington, DC
2022
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/099526108032233729/IDU01bffdd770d209042f50bd54087dae7e38cbe http://hdl.handle.net/10986/37831 |
| Summary: | Since the early 1990s, public-private
partnerships (PPPs) in infrastructure provision have been
expanding around the world and in South Asia.
Well-structured PPPs can unleash efficiency gains in the
provision of infrastructure. But PPPs create liabilities for
governments, including contingent liabilities. Providing
infrastructure through PPPs is preferred to public provision
if the efficiency gains offset the higher cost of private
financing and the unexpected public liabilities that PPPs
may create. This paper attempts to assess the fiscal risks
from contingent liabilities assumed by South Asian
governments owing to their current stock of PPPs in
infrastructure. First, it analyzes the drivers of PPP
distress. Second, it simulates scenarios of fiscal risks for
South Asian governments from risky PPPs. Third, it studies
specific PPP contract designs and their relationship with
early termination in South Asia to draw lessons for future
PPP contract structuring. |
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