Project Summary	Project Objectives	Participant List	Work packages description	Deliverables	Final Conference	Contacts

PROJECT SUMMARY

Currently, an increasing number of Public-Private Partnerships (PPP) is being set up in order to provide transport services and/or infrastructure. In spite of the multitude of forms that such partnerships may take, the increasing involvement of the private sector in the provision of assets and/or services previously provided directly by the states raises significant questions about the application of socially optimal pricing schemes such as Social Marginal Cost (SMC) pricing. Private engagement entails allowing adequate rates of return in a purely financial perspective, which is too often incompatible with SMC pricing principles.

The aim of the ENACT project is two-fold: (i) to assess the extent to which the introduction of SMC pricing obligations may hinder or not the further development ofPPP schemes in the transport sector and, (ii) to devise ways to incorporate such obligations in PPP schemes while, at the same time, taking advantage of the positive aspects that such partnerships can have.

In a first step, the ENACT project will leverage on existing research on the issues of SMC pricing and Second-Best alternatives (optimal mark-ups for cost recovery). The second step will consist of analysing the PPP phenomenon under the light of Incentive and Contract Theory, and the impacts that SMC pricing might have in terms of the informational and incentive structures of PPP contracts. The third step will be to focus on financial markets, and on the impacts that SMC calculation and pricing have on the perception of risk and the demanded rates of return. From this theoretical framework, case studies and simulations will be performed.

The results of the project will serve as the basis of a set of Guidelines to establish a Common European Policy/Regulatory Framework for socially optimal SMC pricing obligations in Public-Private Partnerships in the provision of transport infrastructure and/or services.

Project no. TREN / 07 / FP6TR / S07.68526 / 038558 Instrument: SPECIFIC TARGETED RESEARCH OR INNOVATION PROJECT Thematic Priority: 6.2 - SUSTAINABLE SURFACE TRANSPORTS