Annual Privatization Report 2024 — Transportation Finance
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Annual Privatization Report

Annual Privatization Report 2024 — Transportation Finance

This report reviews 2023 developments in infrastructure investment, focusing on transportation infrastructure.


Worldwide over the past three decades, governments have turned to the private sector to design, build, finance, operate, and maintain infrastructure, including electric, gas, and water utilities; airports, seaports, and toll roads; and pipelines and telecommunications providers. In many cases, existing infrastructure entities needing reconstruction or modernization were “privatized” via either outright sale or long-term leases.

For new infrastructure, governments awarded long-term design-build-finance-operate-maintain (DBFOM) concessions via a competitive process. These long-term public-private partnerships had terms typically between 30 and 50 years.

The sale or lease of an existing facility is referred to as a “brownfield” transaction, while a public-private partnership to develop and operate a new facility is a “greenfield” transaction.

While the United States still lags behind many countries in Europe, Asia/Pacific, and Latin America/Caribbean, this difference arises in part because, in the United States, much infrastructure that was state-owned and operated in Europe and other regions was historically investor-owned in the U.S.—such as telecommunications, electric and gas utilities, pipelines, and a fraction of water and wastewater utilities.

On the other hand, major transportation infrastructure such as airports, seaports, and toll roads that have been widely privatized in Europe, Asia/Pacific, and Latin America/Caribbean countries are still mostly government-owned and operated in the United States.

Both brownfield and greenfield infrastructure projects require long-term financing. Facilities owned and operated by governments are often financed 100% by government revenue bonds or general-obligation bonds, which in the United States are exempt from federal taxation. When the private sector invests in infrastructure, it typically invests equity to cover part of the cost and finances the rest via long-term revenue bonds. To level the financial playing field for U.S. public-private partnerships, Congress provided for tax-exempt private activity bonds (PABs), which are now widely used for such projects.

The large financing needs for privately financed infrastructure have led to the development and growth of infrastructure investment funds, which raise equity to be invested in privately owned or P3 infrastructure.

Public-sector pension funds, seeking to increase the overall return on their investments, are also making significant equity investments in revenue-generating infrastructure.

Likewise, insurance companies and sovereign wealth funds are now making long-term investments in this kind of revenue-generating infrastructure.

This report reviews 2023 developments in public-private partnerships and private infrastructure investment, focusing on transportation infrastructure. While the report’s scope is global, it pays particular attention to U.S. developments in P3 infrastructure and the continued growth in pension fund investment in this field.

Part 2 reviews the continuing growth of infrastructure investment funds worldwide.

Part 3 provides an update on the largest companies and major P3 projects under way globally and in the United States.

Part 4 reviews pension funds’ increasing investment in revenue-generating infrastructure projects.

Annual Privatization Report 2024 — Transportation Finance