Transparency and Risk Allocation in PPP: Addressing Complex Contracts' Mathematical Formulas in the Portuguese Case

  • Paulo Morais Universidade Portucalense Infante D. Henrique
  • José M.A. Matos Instituto Superior de Engenharia do Porto, Politécnico do Porto
  • Noémia Vilela Bessa Vilela Eötvös Loránd University (Budapest), Faculty of Law, Department of Administrative Law
  • Žan Jan Oplotnik University of Maribor, Faculty of Economics and Business
Keywords: public-private partnership, risk management, public utilities, public infrastructure, concession contracts


Concept of partnership between public and private entities, commonly addressed as »Public private partnership« or PPP, have spread all over the world as an innovative model to deliver public services and to help established public infra-structure; as railways and roads, water supply facilities and sewerage systems, other communal services and public infrastructure, even building and managing hospitals, elderly homes, etc. In order to serve the public interest, PPP projects should be based upon a negotiated allocation of risk, which means that project risks should be distributed equaly between the partners. However, issues of transparency, good governance and public accountability have been at risk in the process. Through the Portuguese case of PPP involving the reward contract for the construction and maintenance of highways, the argument for the need of transparent and readable information is presented.


Anwar, B., Xiao, Z., Abbas, H. W. & Ali, Z. (2018) Meta Review of Critical Risk Factors in PPP Projects of Emerging Nations in South Asia, The Journal of Developing Areas, 52(1), pp. 183-209.

Bel, G., Brown, T. & Marques, R. C., (2013) Public–private partnerships: infrastructure, transportation and local services, Local Government Studies, 39(3), pp.303-311.

Bloomfield, P. (2006) The Challenging Business of Long‐Term Public–Private Partnerships: Reflections on Local Experience, Public Administration Review, 66(3), pp. 400-411.

Boardman A. E., Greve, C. & Hodge, G.A., (2015) Comparative analysis of infrastructure public-private partnerships, Journal of Comparative Policy Analysis: Research and Practice, 17(5), pp. 441-447.

Bovaird, T. (2004) Public–private partnerships: from contested concepts to prevalent practice, International review of administrative sciences, 70(2), pp. 199-215.

Brinkerhoff, D.W. & Brinkerhoff, J. M., (2011) Public–private partnerships: perspectives on purposes, publicness, and good governance, Public Administration and Development, 31(1), pp. 2-14.

CEC (2009) Mobilising Private and Public Investmentfor Recovery and Long Term Structural Change: Developing Public Private Partnerships, COM (2009) 615 (Brussels).

Cruz, C. O. & Marques, R. C. (2012) Risk-sharing in highway concessions: contractual diversity in Portugal, Journal of Professional Issues in Engineering Education and Practice, 139(2), pp. 99-108.

Dastidar, K. G. & Mukherjee, D. (2014) Corruption in delegated public procurement auctions, European Journal of Political Economy, 35, pp. 122-127.

De Brux, J. (2010) The dark and bright sides of renegotiation: An application to transport concession contracts, Utilities Policy, 18(2), pp. 77-85.

Flinders, M. (2005) The politics of public–private partnerships, The British Journal of Politics and International Relations, 7(2), pp. 215-239.

Forrer, J., Kee, J. E., Newcomer, K. E. & Boyer, E. (2010) Public–private partnerships and the public accountability question, Public Administration Review, 70(3), pp. 475-484.

Greve, C. (2015) International Public-Private Partnership Policies: Convergence in Themes from ASEAN, the European Union, IMF, OECD, the UN, and the World Bank?, Fourth Annual International Public-Private Partnership (P3) Symposium, New York, 14. September 2015 – 16. September 2015 (New York: Cornell University).

Grimsey, D. & Lewis, M. K. (2005) Are Public Private Partnerships value for money? Evaluating alternative approaches and comparing academic and practitioner views, In: Accounting forum, 29(4), pp. 345-378.

Guasch, J. L. & Straub, S. (2009) Corruption and concession renegotiations.: Evidence from the water and transport sectors in latin America, Utilities Policy, 17(2), pp. 185-190.

Hart, O., Shleifer, A. & Vishny, R. (1997) The proper scope of government: Theory and an application to prisons, Quarterly Journal of Economics, 112(4), pp. 1127–1161.

Haarmeyer, D. & Mody, A (1998) Financing Water and Sanitation Projects : The Unique Risks. Viewpoint: Public Policy for the Private Sector; Note No. 151 (Washington, DC: World Bank), available at: (June 20, 2021).

Hodge, G. A., (2004) The risky business of public–private partnerships, Australian journal of public administration, 63(4), pp. 37-49.

Hodge, G. A., Greve, C. & Boardman, A. E. (eds.) (2010) International Handbook on Public-Private Partnerships (Cheltenham: Edward Elgar).

Hodge, G. A. & Greve, C. (2009) PPPs: The passage of time permits a sober reflection, Economic Affairs, 29(1), pp. 33-39.

Hood, J., Fraser, I. & McGarvey, N. (2006) Transparency of risk and reward in UK public–private partnerships, Public Budgeting & Finance, 26(4), pp. 40-58.

Krumm, T. (2016) The Politics of Public–Private Partnerships in Western Europe: Comparative Perspectives (Cheltenham, Massachusetts: Edward Elgar Publishing).

Macário, R., Couchinho, R. & Ribeiro, J. (2013) Portugal, In: Verhoest, K., Carbonara, N., Lember, V., Petersen, O.H., Scherrer, W. & van den Hurk, M. (eds.) Public Private Partnerships in Transport: Trends & Theory P3T3. Discussion Papers Part I Country Profiles (Brussels: COST Office).

Macário, R., Ribeiro, J. & Costa, J. D. (2015) Understanding pitfalls in the application of PPPs in transport infrastructure in Portugal, Transport Policy, 41, pp. 90-99.

McQuaid, R. W. & Scherrer, W. (2010) Changing reasons for public–private partnerships (PPPs), Public Money & Management, 30(1), pp. 27-34.

Petersen, O. H. (2010) Emerging meta-governance as a regulation framework for public-private partnerships: An examination of the European Union's approach, International Public Management Review, 11(3), pp. 1-21.

Petersen, O. H. (2011) Public-private partnerships as converging or diverging trends in public management? A comparative analysis of PPP policy and regulation in Denmark and Ireland, International Public Management Review, 12(2), pp. 1-37.

Rangel, T., Vassallo, J. M. & Arenas, B. (2012) Effectiveness of safety-based incentives in Public Private Partnerships: Evidence from the case of Spain, Transportation research: policy and practice, 46(8), pp. 1166-1176.

Reeves, E. (2015) A Review of the PPP Experience in Ireland: Lessons for Comparative Policy Analysis, Journal of Comparative Policy Analysis: Research and Practice, 17(5), pp. 467-480.

Romih, D., Oplotnik, Z. & Dajcman, S. Financing of railway infrastructure in Slovenia, Journal of applied economic sciences, 1(2), pp. 39-44.

Rose-Ackerman, Susan (1999) Corruption and Government (Cambridge: Cambridge University Press).

Roumboutsos, A. (2016) Public Private Partnerships in Transport Infrastructure, Transport Reviews, 36(2), pp. 167-169.

Sampaio, Gustavo (2016) Porque falha Portugal? (Lisboa: Manuscrito Editora).

Sarmento, J.M. (2010) Do public-private partnerships create value for money for the public sector? The Portuguese experience, OECD Journal on Budgeting, 10(1), pp. 1-27.

Shaoul, J. (2011) ‘Sharing’ political authority with finance capital: The case of Britain's Public Private Partnerships, Policy and Society, 30(3), pp. 209-220.

Sousa, M.A. (2011) Managing PPPs for budget sustainability: the case of PPPs in Portugal, from problems to solutions, European Transport Conference 2011, Glasgow, Scotland, October 10-12, 20211 (Glasgow: Transportation Research Board).

Trebilcock. M. & Rosenstock, M. (2015) Infrastructure Public–Private Partnerships in the Developing World: Lessons from Recent Experience, The Journal of Development Studies, 51(4), pp. 335-354,

Tvarnø, C. D. (2010) Law and regulatory aspects of public-private partnerships: contract law and contract procurement law, In: Hodge, G., Boardman, A. & Greve, C. (eds.) International Handbook on Public-Private Partnerships (Chelthenham; Edward Elgar), pp. 216-236.

Tvarnø, C. D. (2014) Negotiating Efficient PPP Contracts, The Melbourne PPP Conference 2014, Monash University Law Chambers, 7. October 2014 - 9. October 2014 (Melbourne: Monash University Law Chambers).

Teisman, G. R. & Klijn, E. H. (2002) Public-private partnerships in the European Union. Public-private partnerships: Theory and practice in international perspective, p.165.

Verhoest, K., Carbonara, N., Lember, V., Petersen, O.H., Scherrer, W. & van den Hurk, M. (2013) COST Action TU1001 Public Private Partnerships in Transport Trends and Theory P3T3, 2013 Discussion Papers Part I Country Profiles.

Verhoest, K., Petersen, O. H., Scherrer, W. & Soecipto, R. M. (2015) How do governments support the development of public private partnerships? Measuring and comparing PPP governmental support in 20 European countries, Transport Reviews, 35(2), pp. 118-139.

Viegas, J. M. (2010) Questioning the need for full amortization in PPP contracts for transport Infrastructure, Research in Transportation Economics, 30(1), pp. 139-144.

Walker, B. & Walker, B. C. (2000) Privatization: Sell off or sell out? The Australian experience (Sydney: ABC Books).

Wettenhall, R. (2003) The rhetoric and reality of public-private partnerships, Public Organization Review, 3(1), pp. 77-107.

Wilkinson, J. H. (1994) Rounding errors in algebraic processes (Chelmsford: Courier Corporation).