Partnership contracts, project finance and information asymmetries: from competition for the contract to competition within the contract?

Nicolas Dupas, Frédéric Marty () and Arnaud Voisin
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Nicolas Dupas: Caisse des Dépôts et Consignations - Caisses des Dépôts et Consignations - CDC - Caisse des dépôts et consignations (France)
Frédéric Marty: GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur
Arnaud Voisin: Caisse des Dépôts et Consignations - Caisses des Dépôts et Consignations - CDC - Caisse des dépôts et consignations (France)

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Abstract: Private finance has brought to public-private partnerships a third-party overlook on the contracts. Bringing into the appraisal of PPP deals banks and rating agencies results in outsourcing the due diligence of the project to the party best suited to perform it. This reduction in asymmetries of information can occur both in the competition for the market stage or in the competition within the market stage (yardstick competition).At the negotiation stage, funding competition helps to increase the public sector's information on the deal. Of course, the cost of collecting this information should not overweight the savings it induces. In order to maintain competitive pressure through the lifecycle of the project, value testing schemes, as benchmarking or market testing are used. However, they induce concerns about transaction costs and could reduce the certainty about the charge for the public partner.

Keywords: Private finance initiative; asymmetries of information; funding competition; partenariat public privé; asymétries informationnelles; concurrence pour le financement (search for similar items in EconPapers)
Date: 2011-12-15
New Economics Papers: this item is included in nep-com, nep-cta and nep-ppm
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Published in Seminar of Economic Analysis of Public Law and Policies, Chaire MADP, Sciences Po., Paris, Dec 2011, Paris, France

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