Public Private Partnerships Renegotiations in Transportation: Case Studies from Portugal (Competitive Government: Public Private Partnerships)

There is a growing interest in Public-Private Partnerships (PPPs), particularly in infrastructure and public services. Under the scope of PPPs, renegotiations are becoming more relevant, as empirical evidence suggests that most PPP projects are inevitably renegotiated, i.e., the original contract needs to be adapted to new and unforeseen circumstances. Renegotiations have a substantial impact on the contract and performance of a PPP and usually represent significant costs for users and taxpayers. However, very little is known about the management and, mainly, the process of renegotiating that will, very likely, occur. This book provides a set of case-studies of PPP renegotiations in the transport sector. The authors illustrate the Portuguese experience, a country that has been using PPP extensively, particularly in transport. The case studies provide an extensive and detailed analysis on each aspect of the project and the renegotiation. What drives renegotiations? Why are some projects more renegotiated than others? What are the results? How can the performance of renegotiation processes be improved? These and other questions provide the basis for the discussions in this book. The novelty and value of the book come mainly from the extent of information available. Each case-study deals with these questions in much more detail than what is common in the case-studies approach. Acknowledgments Contents About the Authors List of Figures List of Tables Chapter 1: Introduction 1.1 Introduction 1.2 The Definition of a PPP 1.3 Alternative Models 1.4 Operation and Structuring of a PPP 1.5 Renegotiations References Chapter 2: The Portuguese Experience of Public-Private Partnerships and Renegotiations 2.1 Introduction 2.2 The Overall PPP Context 2.3 The PPP Procurement Process 2.4 Projects and Data 2.5 Major Pitfalls 2.6 PPPs in the Road Sector 2.7 The Court of Auditors ́ Analysis of PPPs 2.8 The PPPs in the Context of the ``Troika ́ ́ Programme 2.9 What Went Well with Portugal ́s Experience of PPPs? 2.10 What Went Wrong with Portugal ́s Experience of PPPs? 2.11 PPP Renegotiation Experience Appendix 1: Renegotiation Clauses in PPP Contracts References Chapter 3: Fertagus (Trains) 3.1 Introduction 3.2 Overview of the Concession 3.3 Concession Data and Finance 3.4 Risk Allocation Matrix 3.5 Renegotiation Triggers 3.6 Contract Changes 3.7 Renegotiations Outcomes 3.8 Main Findings References Chapter 4: Lusoponte (Bridge) 4.1 Introduction 4.2 Concession Overview 4.3 Concession Data and Finance 4.4 Risk Allocation Matrix 4.5 Renegotiation Triggers 4.6 Renegotiations Outcomes 4.6.1 Financial Rebalancing Request I 4.6.2 Financial Rebalancing Request II 4.6.3 Financial Rebalancing Request III 4.6.4 Financial Rebalancing Request IV 4.6.5 Financial Rebalancing Request V 4.6.6 Request for Financial Rebalancing VI (Global Agreement) 4.6.7 Financial Rebalancing Request VII 4.6.8 Financial Burden for the Public Sector 4.7 Main Findings References Chapter 5: Metro Sul do Tejo (Light Rail) 5.1 Introduction 5.2 Concession Overview 5.3 Concession Data and Finance 5.4 Risk Allocation Matrix 5.5 Renegotiations Triggers 5.6 Contract Changes 5.6.1 First Renegotiation 5.6.2 Second Renegotiation 5.7 The Outcomes of the Renegotiations 5.7.1 First Renegotiation 5.7.2 Second Renegotiation 5.8 Main Findings References Chapter 6: AEA Highway (Road Sector) 6.1 Introduction 6.2 Overview of the Concession 6.3 Concession Data and Finance 6.4 Risk Allocation Matrix 6.5 Renegotiations Triggers 6.6 Changes to the Contract 6.7 Outcomes of the Renegotiation 6.8 Main Findings Appendix 1: Contract Clauses Appendix 2: Clause 88: The Financial Balance Appendix 3: Chronogram of the Events Appendix 4: The Main Arguments of both Parties Appendix 5: Full Timeline of the Renegotiation Process References Chapter 7: Litoral Centro-Brisal 7.1 Introduction 7.2 Overview of the Concession 7.3 Concession Data and Finance 7.4 Risk Allocation Matrix 7.5 Renegotiations Triggers 7.6 Contract Changes 7.7 Outcomes of the Renegotiations 7.8 Main Findings References Chapter 8: Douro Litoral (Road Sector) 8.1 Introduction 8.2 Overview of the Concession 8.3 Concession Data and Finance 8.4 Risk Allocation Matrix 8.5 Renegotiations Triggers 8.6 Contract Changes 8.7 The Outcomes of Renegotiations 8.8 Main Findings Appendix 1: Financial Indicators 2016-2018 Appendix 2 References Chapter 9: SCUTs 9.1 Introduction 9.2 Concession Overview 9.3 Concession Data and Finance 9.4 Risk Allocation Matrix 9.5 Renegotiations Triggers 9.5.1 Costa de Prata 9.5.2 Norte Litoral 9.5.3 Grande Porto 9.6 Changes to the Contract 9.7 The Outcomes of the Renegotiations 9.8 Main Findings References Chapter 10: Troika Renegotiations 10.1 Introduction 10.2 Overview of the Concessions 10.3 Concession Data and Finance 10.4 Risk Allocation Matrix 10.5 Renegotiations Triggers 10.6 Contract Changes 10.7 Outcomes of the Renegotiations 10.8 Main Findings References