New research finds highways managed under Public-Private Partnership agreements are safer than public models

High quality highways are safer than those with a low quality road design, but not all high quality highways are safer in the same degree. According to a recent study by the UB School of Economics, high quality highways managed under Public-Private Partnerships (PPPs) appear to be more secure than those managed by the public sector. The annual number of both accidents with victims and victims in these roads is lower under PPPs. Results also show that the number of victims is lower on low quality highways under PPPs, but the number of accidents with victims is roughly the same.

The study was co-authored by the UB School of Economics researcher and deputy director at the Observatory for the Analysis and Evaluation of Public Policies (OAP) Daniel Albalate and the lecturer at the University of Barcelona and research affiliate at the OAP Paula Bel-Piñana. The researchers analysed the effects of PPP models on road safety outcomes in Spain, where there is a mix of production models composed of public highways and those privately managed under PPP agreements. “The effects of public private partnerships on road safety outcomes” has been published on the scientific journal Accident Analysis and Prevention.

PPPs are contractual agreements between the public administration and at least one private company, in which the private party is engaged to finance, build or rehabilitate and manage a project through a long-term contractual agreement until the contract expires and the asset returns to public ownership. The authors of the study suggest that PPPs have more incentives than the public sector to increase the safety and quality.

More specifically, the authors point out the fact that PPP managers are interested in providing safety and good quality standards in order to attract users, as all PPPs in Spain are remunerated according to the volume of users. The public sector, on the other hand, does not have incentives to increase traffic. The researchers also highlight that safety risks might be subject to civil liabilities only in the case of PPPs, which encourage private operators to provide higher safety standards than the public sector.

In addition, some PPPs have quality or safety regulated incentives in their contracts (e.g. contract extension), whereas public operators do not get any return from better road safety outcomes. Therefore, managers of privately operated highways are more likely to take actions to work on that direction. Finally, concession contracts establish a set of indicators that oblige the concessionaire to guarantee the maintenance of the infrastructure in the most optimal conditions for the user, while there is less need for regulation if the owner is the public sector.

Although the findings of this study may provide arguments for going private, the authors emphasise that public operators might also learn from the better actions and performance of private operators in order to improve their outcomes, without going private. The results also indicate that–beyond the road management modal–the most important factor in determining road safety outcomes is the quality of standard of the road infrastructure. The design and initial construction are crucial because once the road is built it is very costly and difficult to modify the design.

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