Risks, Contracts, and Private-Sector Participation in Infrastructure
Publication: Journal of Construction Engineering and Management
Volume 137, Issue 11
Abstract
This article examines how risk is reflected in infrastructure regulatory contracts, using examples from water utilities to illustrate key points. Partnerships between public and private sectors in intensive capital network services require risks to be assigned to the contractual party that is better able to mitigate them or to bear them. After identifying risks that must be addressed in infrastructure contracts, their classification, allocation, and impact are presented along with the measures to minimize risks. Two contracts in the water sector in Portugal are analyzed. One arrangement corresponds to a public–private partnership (PPP) of the purely contractual type (concession arrangement) and the other to an institutionalized PPP (mixed company). We conclude that risk is a key issue in contracts with the private sector; an appropriate allocation of risks is a necessary condition for successful contracts.
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Acknowledgments
The writer gratefully acknowledges his sabbatical scholarship granted by the Portuguese Foundation for Science and Technology.
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Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 137 • Issue 11 • November 2011
Pages: 925 - 932
Copyright
© 2011 American Society of Civil Engineers.
History
Received: Jun 18, 2010
Accepted: Jan 6, 2011
Published online: Jan 8, 2011
Published in print: Nov 1, 2011
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