Policy Brief

Risks and Rewards of Public-Private Partnerships for Highways

The reasons public-private partnerships are being used to fund infrastructure

Public-Private Partnerships (PPPs) for infrastructure are contracts between public and private entities for the provision of facilities in areas such as power, water, transportation, education and health. Well-written PPP agreements specify the allocation of risk, which should create incentives for the private provider to deliver more efficiently and in a timelier manner than would be the case if the project were undertaken by a state-controlled entity. States are increasingly using PPPs to deliver new transportation capacity, thereby improving road access without unduly increasing the burden on taxpayers. PPPs come in many forms, including both development of new infrastructure (“greenfield” projects) and maintenance and improvement of existing infrastructure.