Welfare impacts of road construction using a public-private partnership : a CGE analysis of a project

• Autor(a) principal: Bayar, Ali
• Data de Publicação: 2009
• Outros Autores: Fortuna, Mário, Rege, Sameer
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.3/4836
• topic: Infraestrutura Viária; Parcerias Público-Privadas (PPPs); Public-Private Partnerships; Road Infrastructure; Azores

The Azorean Government embarked on a public-private partnership to build a road on the island of São Miguel, to circumvent the budget restriction imposed by the central government. We build a sequentially dynamic general equilibrium model with 45 sectors to measure the welfare changes arising from the project. The initial investment is amortised over a period and the payments are simulated through an increase in income taxes, reduction in transfer payments or calculating the fall in transport margins. We find that under any type of repayment scheme the welfare benefits do not justify the road construction thus making it a poor investment decision.