This is the question posed to the members of the new PPP Network, http://pppnetwork.ning.com/ .
Forecasting is a very difficult thing to do, especially about the future …
That said, by Mark Twain, who gambled on riverboats, not on riverboat traffic, one must also look at who is doing the forecast and who is taking the risk of the traffic forecasting. With very highly leveraged public service projects, sponsors have relatively little to loose on the downside, and the Government can usually be counted on to step in with a bailout or a retroactive guarantee in case of default, in order to maintain the public service delivery.
Once-burned investors become twice-shy, refusing traffic risk especially in greenfield projects in new traffic corridors which depend heavily on induced traffic or inter-modal transfer. Forecasting traffic in well-established brownfield corridors is seen as having a lower forecast error, and therefore lower risk for the investor.
The sensitivity of the ADSCR to optimism bias also suggests the need to reconsider and be cautious about the current fashion of availability payments, which keep the traffic risk with the public sector. Availability payments are more and more frequent now , both in new greenfield infrastructure projects, but also as a result of re-allocation of project risks upon project renegotiation when the expected traffic ramp-up failed to materialize. This trend may be seen as "de-risking", due the growing risk aversion as investors and creditors become much more selective in the current financial crisis.
But the re-allocation of traffic risk from the concessionaire back to the public partner or "Concedente" in private one-on-one renegotiations, with little or no disclosure of actual to forecasted traffic trends and of change in contractual terms and conditions, is a practice that faills short of the minimum requirements for transparency in public procurement.
Thus, it may turn out that the less the traffic risk taken by the sponsors and the banks, the more the traffic risk in the project overall, and thus the more the traffic risk to the taxpayers.
The next question is whether traffic forecast errors are accidental or intentional. Studies indicate that the higher the probability of renegotiation, the higher the incentives for promoters to engage in "strategic behaviour", in the conviction that they will be spared most of the downside risks.
Mariana Abrantes de Sousa, PPP Lusofonia, Portugal, 26-Abril-2010
Traffic risk and PPP financing in the financial crisis, Risco de tráfego e financiamento de projectos PPP em tempo de crise, http://ppplusofonia.blogspot.com/2009/08/noticias-sobre-ppp-e-gestao-de.html
PPP bankability and budget sustainability in the financial crisis, Como compatibilizar bancabilidade para do projecto com sustentabilidade orçamental em tempo de crise financeira, http://ppplusofonia.blogspot.com/2009/11/sessao-sobre-o-financiamento-de.html
Risk reallocation and PPP renegotiations, Partilha de riscos e renegociação, http://ppplusofonia.blogspot.com/2009/10/scut-renegociadas-passam-risco-de.html
Renegotiation of port terminal concession with risk reallocation, Renegociação de concessão portuária de terminal de contentores http://ppplusofonia.blogspot.com/2009/08/noticias-sobre-ppp-e-gestao-de.html
Public sector guarantees for PPP project financing, Garantias públicas para financiamento privado de projectos PPP http://ppplusofonia.blogspot.com/2010/03/should-public-sector-guarantee-private.html
PPP, risk-less capital, and public debt, PPP, capital sem risco e divida pública
Budget sustainability, and PPP project arbitration, Sustentabilidade orçamental de contratos PPP e a arbitragem http://ppplusofonia.blogspot.com/2009/09/sustentabilidade-de-contratos-de.html
Irwin on how to manage public guarantees for PPP projects, Irwin sobre como gerir garantias públicas para projectos PPP, http://ppplusofonia.blogspot.com/2009/07/timothy-irwin-on-how-to-manage.html
Ho on game theory and renegotiations of PPP contracts, S. Ping Ho sobre a teoria de jogos e a renegociação de contratos PPP http://ppplusofonia.blogspot.com/2009/01/teoria-de-jogos-e-renegociao-de-ppp.html
Vassallo on the causes of accidental or intentional, traffic overestimation in PPP projects, Vassallo sobe as causas de sobre-estimação de tráfego , acidental ou intencional, das previsões de tráfego em contratos PPP http://ppplusofonia.blogspot.com/2009/01/teoria-de-jogos-e-renegociao-de-ppp.html , http://www.eib.org/attachments/upm_2007_progress_report_2_a.pdf
Grandes Obras Públicas http://ppplusofonia.blogspot.com/2010/05/grandes-obras-publicas-problema-ou.html
VER relacionado mini-curso em PPP