In the last two decades the attraction of private capital as a way to finance urban transport projects has revived in Europe. In the case of concessions, the private investment costs are recovered during the concession period by means of future revenue streams (non-recourse financing of commercially viable projects) and/or public support to reach financial viability (limited recourse project financing). In all three forms, the full ownership of the transport project is transferred to the public party after a fixed period. The paper investigates the strategy formulation/assessment/choice referring to alternative forms of provision of urban rail infrastructure in Europe. The construction risk of urban rail projects (cost overruns, late completion) is best controlled by the private party. Therefore, a risk transfer to the private party is meaningful. In underground metros especially, the technical and the completion risk (e.g. unforeseen ground conditions) is considered by far as the most significant project risk. This means that the promoter should be financially robust, because the risks involved are far larger than those for conventional turnkey contractors. European urban rail projects developed with private capital along dimensions, such as scale (new or extension of existing system), scope (DBFT/ DBFM/ DBFMO) and forms of PP collaboration, mainly from England, France and Greece are described. The planned Seville Metro Line 1, Tagus LRT south of Lisbon and Dublin Underground are also considered. Finally, the specific features of the PP collaboration for the development of four Athens Metro extensions are comprehensively discussed. Special emphasis is given to the strategic options elaborated, their financial assessment and the selected strategy for PP collaboration in the development of the extensions. For the covering abstract see ITRD E126595.
Abstract