A Dysfunctional Legal Framework for Failed Public–Private Partnership Projects: Accounting or Economics?

Vicente Alcaraz Carrillo de Albornoz (), Juan Molina Millán, Antonio Lorenzo Lara Galera and Belén Muñoz-Medina
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Vicente Alcaraz Carrillo de Albornoz: Ingeniería Civil: Construcción, Universidad Politécnica de Madrid, Aranguren 3, 28040 Madrid, Spain
Juan Molina Millán: Ingeniería Civil: Construcción, Universidad Politécnica de Madrid, Aranguren 3, 28040 Madrid, Spain
Antonio Lorenzo Lara Galera: Ingeniería Civil: Construcción, Universidad Politécnica de Madrid, Aranguren 3, 28040 Madrid, Spain
Belén Muñoz-Medina: Ingeniería Civil: Construcción, Universidad Politécnica de Madrid, Aranguren 3, 28040 Madrid, Spain

Social Sciences, 2022, vol. 11, issue 12, 1-12

Abstract: Public–private partnerships (PPP) are complex long-term arrangements used in public infrastructure, public services or public facilities projects. To ensure that PPPs transfer enough risk to the private sector, European directives first and member states’ national legal frameworks later have modified how these projects are treated in the event of early termination. This paper aims to analyze said changes to determine if they well serve the public interest. The analysis is done by mapping the different alternatives a granting authority has when confronted with a PPP early termination, as stated by the law. We illustrate our analysis with a case study: The Móstoles-Navalcarnero railway, a Spanish PPP project that came to early termination during the construction stage. For this project, we determine the options available to the granting authority with the old Spanish legal framework (in force at the time the project was awarded) and with the new Spanish legal framework.

Keywords: public-private partnerships; PPP; public law; public accounting; contract early termination; final payment; Móstoles-Navalcarnero railway (search for similar items in EconPapers)
JEL-codes: A B N P Y80 Z00 (search for similar items in EconPapers)
Date: 2022
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