Risk Allocation in Public–Private Partnership Infrastructure Projects in Developing Countries: Case Study of the Tehran–Chalus Toll Road

Abstract

All over the world, limited funding for the development and operation of infrastructure projects propels governments to attract private investment and enter public–private partnerships (PPPs). Different types of PPPs have been practiced in infrastructure development in both developed and developing countries, with diverse results. Although PPPs have many advantages, they involve some complexities in planning, execution, and monitoring and control that vary according to specific project and country conditions. This paper provides a case study of the Tehran–Chalus Toll Road project, one of the largest highway projects in Iran. The authors analyze the contract organization of the PPP project, identify the most important risks, compare the project’s organization with successful and unsuccessful experiences in similar PPP projects, and suggest ways to improve risk allocation to achieve better project performance for this and other PPP projects in developing countries.