PPIAF

Private activity in transport infrastructure in developing countries reached peak levels in 2005-07, both in terms of new projects and investment commitments. Such activity was more evenly distributed across regions and income groups than during the 1990s, when upper middle income countries accounted for most of the transport activity . Fourty-eight low- and middle-income countries implementd new transport projects, though investment remained concentrated in a few countries. The top five countries by number of projects (India, China, Nigeria, Mexico, and Indonesia) accounted for 67% of new projects implemented in 2005–07 while the five countries with the highest investment commitments (China, India, Mexico, Turkey, and Hungary) accounted for 62% of transport investment in that period.

Another feature of recent private activity in transport is the use of government payments – either to complement or entirely replace revenues from user fees -- as a way to make projects more financially viable. At least 13 developing countries provided government payments to private operators of transport projects in 2005-07. The forms of government payments used vary significantly across countries and projects. In most cases, however, the amount of government support was determined through the competitive tenders in which the concessionaire was selected. In other cases, the amount of government support was defined by the government prior to the tender. With the exception of four projects, government payments have been used only in road projects. The exceptions are South African Gautrain light rail concession, which was granted a US$3 billion government subsidy; Ecuadorian Manta port concession, which obtained a US$55 million subsidy; Indian GMR Hyderabad International Airport BOT, which received a US$25 million capital grant; and the Peruvian Regional Airport Network Group I concession, which was granted government payments required to cover actual gap between project revenues and cost.

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