ABSTRACT
Funding new transport infrastructure for cities has always been among the greatest challenges for government officials and planners. In today’s urban economy, costs appear so high both in absolute terms and as a portion of regional GDP, that even the most welldesigned and beneficial projects face daunting hurdles to gain approvals and funding. To compound this burden, the risks of delays and cost overruns can be exceptionally large.1 Certain high profile projects have seen their costs escalate by billions of dollars, often more than doubling. Traditional planning, procurement, and project management techniques are often blamed for this lack of control. In the past decade, integrated procurement strategies combining private-sector management and financing have formed the core of hundreds of deals, which are now delivering, or will soon deliver, public projects in the United Kingdom. These transactions, which are referred to as “PFIs” (Private Finance Initiatives) or “PPPs” (Public Private Partnerships), have rapidly gone from the status of pilot projects to a large, even dominant market in Britain.2 Instead of procuring capital assets and paying for them up-front, the PPP structure creates a stand-alone business that develops, finances, and operates an asset in return for a payment generally over a period of twenty to thirty years.
