Driving Factors of Concession Period in Healthcare Public Private Partnerships

Abstract

Public Private Partnerships (PPPs) play a vital role in infrastructure development and public service delivery, with government entities collaborating with private sector organizations to achieve shared goals in the long term. An essential aspect of PPP contracts is the concession period, during which Special Purpose Vehicles (SPVs) are responsible for financing, building, operating, and maintaining public assets. The concession period has significant implications, associated with project risk, revenue, operations expenses, profitability, and bankability. While numerous studies focus on determining “optimal” concession periods, fewer explore the factors driving concession periods in national PPP programs, especially for social infrastructure projects relying primarily on availability payments. To fill this gap, this research aims to identify and analyze the effect of various potential factors on the length of the concession period, using linear regression analysis on a data set of healthcare PPP projects in Italy. This research theoretically contributes to understanding the driving factors of concession periods in PPP projects and provides insights for a balanced approach to PPP project planning and regulation and related strategies. On the practical side, decision makers can negotiate optimized concession periods, ensuring successful and sustainable public infrastructure projects.