Chapters 3 through 6 describe how financing, risk allocation, and implementation under the project contracts usually work in a PPP project. This chapter sets out some of the specific requirements of four different sectors: transportation, telecommunications, power, and water and sanitation. It does not attempt to provide detail, nor will it discuss all issues in all subsectors, but is specifically focused on the characteristics for each sector that will influence the approach to PPP most appropriate to each.

Transportation

Transportation projects, including airports, roads, railways, light rail, buses, tunnels, and bridges, have traditionally been financed by a combination of private and public funding. Governments are increasingly looking to the private sector for input in the development of new transportation schemes and the privatization of those already in existence. The transportation sector is characterized by its two critical constraints: demand forecasting and land. Demand for transportation infrastructure is influenced by competing modes of transportation, demographic shifts, economic conditions, the cost of the facilities to end users, convenience, individual preference, speed, and a number of other, often interrelated factors that make accurate demand forecasting difficult at best. The need for access to large amounts of land and space to build transportation facilities makes them expensive, long-term, and politically sensitive undertakings.