Is There Room for a PPP Secondary Market? Financial Analysis of the PPP Transport Sector

Abstract

Public private partnerships (PPP) projects usually last several decades, so should the initial sponsors sell their project before the end of the contract? A financial framework is developed in this paper to determine the circumstances making such a sale a rational choice, with a superior performance to the nonselling alternative. Application of this framework to transport infrastructure suggests there might be room for a PPP secondary market in developed economies, but this is not so clear in emerging markets.