VALUATION CRITERIA IN ITALIAN PUBLIC PRIVATE PARTNERSHIP (PPP)

Laura Gabrielli and Giuliano Marella

ERES from European Real Estate Society (ERES)

Abstract: In the last decade, Italian laws have introduced a number of important instruments to overcome the division between the commissioning and the delivery of public works in the urban planning process. The first step in this direction was made by the Law 179/1992 that introduced Urban Renewal Plans. These plans are an attempt to bring together public and private finances in order to boost the construction and the management of public works, so as to deliver a strategy for delivering high quality public services. Other initiatives such as STU (Society for Urban Transformation) and PFI (Project Finance Initiative) allow, with the use of private investment, a strong link between the conception and the construction of public works. This also encourages the involvement of private sector expertise by utilising the management skills and financial acumen of the business community. However, these initiatives do not solve some of the crucial problems facing the public sector, such as: * They do not provide investors with a full financial breakdown of the projects but give only some indicative estimates; * They do not indicate how to quantify the economic indicators such as costs, revenues, investment decision techniques that can help the private sectors to evaluate the profitability of investments. // The aim of this paper is to define a model for decision makers, both for the public and the private sector, in order to determine transparent and clear criteria to evaluate any collaboration between public bodies, such as local authorities or central government, and private companies.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2006-01-01
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