Infrastructure Financing with Unbundled Mechanisms
This paper discusses the radical change of the role of the public sector in the financing of infrastructure projects during the nineties. The generalized response to the new environment has taken the form of arrangements in which private initiative is empowered to construct and finance the projects, retaining their ownership temporarily. These arrangements, which are referred to as Build-Lease-Transfer (BLT) and Build-Operate-Transfer (BOT), respectively, have proved to be an efficient approach to develop infrastructure that the public sector by itself could not undertake. The authors argue that a generalized use of BOT schemes, whose main characteristic is the concentration of all responsibilities (building, management and financing) in a unique private agent (or a joint venture of private agents), could be challenged on the grounds that the unbundling of these responsibilities is a more efficient alternative.