ABSTRACT
This paper aims at analyzing how different types of fiscal commitments to Public Private Partnerships (PPP) can be effectively utilized in the preparation and implementation of PPP projects in transport infrastructure. The instruments include risk mitigation instruments offered by international financial institutions and public financial support for infrastructure projects. In PPP projects in roads, it is important to identify risks and allocate responsibility for the identified risks between the public and private sectors. In particular, allocating revenue related risks is critical because it involves uncertainty for future demands. However, not all public sector agencies are capable to take those risks, especially in developing economies, due to their insufficient fiscal condition and limited track record of similar type of projects. In order to attract private sector investment to PPP road projects in those countries, the fiscal commitments discussed in the paper could be utilized to mitigate the risks.
