Journal Issue

Italy: Selected Issues

International Monetary Fund
Published Date:
February 2006
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V. Infrastructure Investment and PPPs1

Core Questions, Issues, and Findings

  • What is the aim of the chapter? The chapter looks at issues related to infrastructure investment in Italy. Revamping key infrastructure projects is an important objective of the Italian government, as these are seen as an engine for future growth. In an environment of tight budget constraints, Public Private Partnerships (PPPs) also represent a promising avenue to involve the private sector in the provision of infrastructure services; accordingly, recourse to PPPs is increasing in Italy, although from a very low base.

  • What are the main results of the analysis? Despite policy intentions, the number of project completed to date has fallen short of plans. While financing constraints have played a role, other factors appear to limit severely implementation capacity, including administrative hurdles, inadequate project selection and evaluation, and a general lack of coordination and monitoring of public projects.

  • What are the policy implications of this chapter’s findings? Project prioritization and evaluation should be strengthened, especially at the local level. In addition, transparency in the recording of PPPs and associated contingent liabilities, including in budget documentation, should be ensured. As these operations may involve significant government obligations in the future, these measures will be essential to safeguard fiscal sustainability in Italy’s high debt environment.

A. Background

1. Promotion of infrastructure projects has long been on the agenda of the Italian government. The authorities have repeatedly stated their intention to increase public investment, as a key driver to higher growth and productivity. A number of initiatives in recent years, including the adoption of a framework law on “strategic” public projects in 2001, have sought to revamp infrastructure programs. However, policy intentions have often clashed with the reality of tight budgetary envelopes and sluggish bureaucratic procedures, and the government is concerned that infrastructure investment is lagging.2

2. In this environment, public private partnerships (PPPs) might be seen as an attractive alternative to direct public investment in infrastructure. The authorities are mindful, however, that the private sector will not participate in the construction and provision of infrastructure services without a supporting regulatory and legal framework. While PPPs are increasingly being used in Italy, they nonetheless remain at a very low level, especially when compared to experiences in other advanced economies.

3. This paper reviews the recent experience with public infrastructure investment and PPPs. It illustrates the legislative and institutional framework for public investment and PPPs, highlights the experience so far, and offers some policy suggestions for further development in these areas. The main conclusion is that Italy’s project selection and execution currently appear to fall short of best-practice (see IMF, 2004). Also, while PPPs may bring efficiency gains in the provision of infrastructure services, they also harbor risks that may have adverse implications for fiscal sustainability over the medium term. Priority should therefore be given to ensuring that projects are properly selected and planned, and that clear and transparent accounting rules and reporting procedures are followed.

B. Public Investment Projects: Too Few or Too Many?

4. Italy’s public investment declined in the early 1990s, but has recovered somewhat in recent years (Figure 1). As a share of GDP, public investment dropped from above 3 percent in 1991 to just above 2 percent in 1995, and increased again to below 3 percent in the last few years. In addition to fiscal consolidation efforts in the run-up to EMU entry, the slowdown in the mid-1990s was also due to the impact of judicial investigations into public works irregularities, with some projects being interrupted as a result. More generally, declining public investment is not necessarily a worrisome sign, as a general trend toward a smaller public sector is reflected in lower public investment figures.3

Figure 1.Public Investment, 1991–2004 1/

(in percent of GDP)

Source: Eurostat.

1/ Data for Italy exclude sales of assets as of 2000 (which are recorded as negative capital spending under Eurostat accounting rules); sales of assets in the previous years were negligible. For the other countries, data include sales of assets and therefore may not be comparable.

5. At the beginning of this decade, a number of initiatives were promoted to bolster public investment. In 2001, a new legislative framework for public projects was introduced, the so called Objective Law (Legge Obiettivo 443/2001), followed by implementing regulations in 2002 (legislative decree 190/2002). The main purpose was to streamline the realization of public works defined to be “strategic and of major national interest” by establishing new and simpler procedures for authorizations and permits (Box 1). Along with the Objective Law, a Strategic Infrastructure Program (Programma Infrastrutture Strategiche) was approved in December 2001. The program was formulated by the interministerial committee on economic planning (CIPE) in consultation with regional authorities; it originally foresaw total spending of €125.8 billion over a decade to promote major infrastructure projects. These included highways and railways, the construction of three mountain passes, rehabilitation of urban areas, installation of a hydrological system in the South, a bridge over the Messina strait, and a project for the Venice lagoon—for a total of more than 220 projects. While some projects were new, others had long been in the making (for example, since the 1970s for the Salerno-Reggio Calabria highway) and were supposed to receive new impetus from the reform. Being the result of coordinated efforts across various level of governments, the program held the promise of faster and better selection and implementation of projects.

Box 1.Strategic Infrastructure Projects and the Objective Law

The 2001 Objective Law established a fast-track system for “strategic” infrastructure projects identified by the central government, in cooperation with local governments. The central player in this new framework is the “general contractor” (introduced by legislative decree 190/2002), who is responsible for “the execution, by all means, of a work corresponding to the specific requirements of the contracting authority.” The general contractor will enter in a time-bound, fixed-price turnkey contract with the awarding authority, according to a design, build, finance and transfer scheme (DBFT). As the general contractor is not responsible for the operation of the new infrastructure, which is transferred to the awarding authority upon completion of construction, projects undertaken under this framework are close to traditional procurement—where the private sector is involved in the construction, but not the management, of a project (the latter being a main feature of PPPs, see below).

In contrast to a traditional procurement contract, the general contractor is responsible for all stages of project construction and has more flexibility in undertaking them. While the awarding authority remains in charge of outline design, the general contractor is responsible for developing final design, securing all the necessary authorizations and permits, carrying out the construction—that can be sub-contracted in whole or in part to third parties—and for pre-financing (in whole or in part) the construction phase. Accordingly, the procedure under legislative decree 190/2002 is called “integrated procurement.” The possibility of assigning part of the work to third parties is the major novelty of this framework—this is supposed to result in faster execution, as tendering for subcontracts is not required. At the same time, if the project needs modifications, the general contractor can introduce them more freely than otherwise foreseen by the law for “standard” (non-strategic) projects. The law also sets time requirements for the various stages of project design (see Box 2).

6. Despite its original intentions, the Objective Law has so far not delivered the intended results. A recent report on the law’s implementation prepared by the Services of the Chamber of Deputies points to a mixed record; another report by the Court of Auditors identifies a number of pitfalls.4

  • Insufficient project definition and specification. This is more acutely felt at the local government level, where projects are selected and awarded.

  • Duplication of tasks. In many cases, various agencies are duplicating valuations and project assessments, leading to unnecessary implementation delays.

  • Piece-meal approach to projects. Implementing agencies focus on individual projects, rather than adhering to the overall strategic plan.

  • Inadequate financial coverage versus excessive number of projects. From the beginning, there was a significant gap between the program’s financing requirements and the available funding. While this could have led to better project prioritization, in practice it has led to “trickle” financing (finanziamento a pioggia), with limited resources being dispersed across a large number of projects (and resulting in insufficient financing for most of them).

  • Long and heterogeneous implementation. Excessive implementation lags carry the risk of cost overruns and redefinition of projects.

  • Insufficient monitoring. There is a lack of periodic and standardized reporting on project implementation. Work interruptions—often due to inadequate planning or weak execution and payment delays—are a major source of financial penalties. There also seems to be a general lack of knowledge about available funding and status of implementation of ongoing projects—even for completed projects: the Court could not find comprehensive records of incurred costs or possible contingent liabilities.

7. Financing constraints may have contributed to the impression that too few public projects are undertaken in Italy, but the main problem appears to be institutional. Lack of proper prioritization and procedural hurdles may have led to lower-quality projects being initiated at the expense of higher-return ones, and insufficient strategic planning may have resulted in very few projects being completed within the timelines established in the original contracts. A review of delays in implementing projects, regardless of their “strategic status,” is sobering (Box 2).

Box 2.Public Projects: How Long Do They Take?

Very long. A recent study by the National Association of Builders (ANCE, 2005) presents results for a sample including 144 infrastructure projects (with a price tag of more than €10 million), subdivided in three groups:

  • 50 “regular” projects (not covered by the Objective Law);

  • 74 strategic projects included in the Strategic Infrastructure Program (of which 37 enjoyed the “expedited” approval procedures);

  • 20 completed projects.

Each project is classified into eight implementation stages: three for project design (preliminary, final, and executive), tendering setup, tendering , construction startup (“consegna lavori”), construction, and final testing (“collaudo”). This allows a comparison across projects that follow different procedures.

Project design alone required between some 1,400 days (4 years) and 2,200 days (6 years) on average for regular projects, with longer periods for larger projects (more than €50 million).

Implementation lags for large infrastructure projects: from design to construction startup
Project amountProject designTenderingTenderingConstruction
Non strategic projects
< Euro 50 million4275174861,430131259108
> Euro 50 million5541,1435522,24917243058
Strategic Projects (Law 190/2002)421> 365n.a.n.a.n.a.n.a.n.a.
Days required by Law 190/2002180210
Source: ANCE (2005).

Once project design is complete, subsequent stages proceed faster, but only in relative terms. The preparation of tendering documents, the actual tendering and the official startup of construction account for an additional 500 to 700 days, for smaller and larger projects, respectively. The tendering process is longest for road projects, where ANAS (the public road company) is found to be the slowest awarding authority.

In all, projects design and selection take an average of 5 to 8 years—still excluding actual construction. This is for the 50 non-strategic projects in the sample currently under implementation. For the 20 completed projects, delays were also significant (46 percent above the time required under the related contracts); the average implementation time was over six years.

Surprisingly, implementation delays are not shorter for “strategic” projects, where the expedited procedures do not seem to be effective. Out of the 37 projects eligible for expedited approval procedures, only one has received final design approval to date. For 12 projects that completed the preliminary design, the average time was 14 months (421 days, see table), 8 months longer than mandated by the law (180 days). For 10 projects that are still waiting for preliminary approval, the accumulated delay was 21 months at the time of the report’s publication. No strategic project has been completed to date.

According to the ANCE report, a number of factors explain these delays. Lack of prioritization and an excessive number of projects crowd out more meritorious interventions, clog administrative channels, and dilute financing across too many initiatives. The impact of litigation on implementation delays is significant: about one-third of projects under the Objective Law have been litigated (this share is 15 percent for regular projects). Better coordination among the involved entities would help minimize litigation risks.

8. The private sector has so far played a limited role, but there is scope for progress. The Court of Auditors report finds that uncertainty about project execution and timing, and costs and complexity of administrative procedures represent a deterrent to more significant participation of the private sector in investment projects. Some projects may also be simply too big to attract private sector participation, as was the case, for example, with the high speed train project (Box 3). However, there are reasons to believe that, if underlying weaknesses are properly addressed (as the authorities are doing in some areas), PPPs will help realize and manage some important infrastructure projects.

Box 3.High Speed Trains: From private to public

Treni Alta Velocita’ (TAV) is the largest public investment project ever attempted in Italy. The first stage (covering the axis Turin-Milan-Naples) is estimated to cost some €30 billion (2.5 percent of GDP) and is slated to be completed by 2009. It will be followed by a Genoa-Milan-Verona-Padoa connection costing an additional €14 billion, to start operating in 2012/13. TAV is a special project company of Rete Ferroviaria Italiana (RFI, fully owned by the Ministry of Economy and Finance); it coordinates and manages all the construction related to this project (as a general contractor to build the tracks, with sub-contractors to build the urban junctions, according to the framework established by law 190/2002, see Box 1).

At its inception in 1991, TAV was a joint venture company with private shareholders in the majority. Its capital was provided by the government (43 percent) and the private sector (57 percent, composed of a consortium of major investment banks). In 1994, a state guarantee (guarantee of last resort) on TAV operations was introduced.

In 1998, TAV was converted into a publicly-owned company—due to concerns about uncertain costs, implementation lags, and inadequate future revenue. All its capital was taken over by RFI. Over time, the need to secure firm financing for such a costly program became more evident. The budget law for 2003 established that TAV is to be fully financed by Infrastrutture Spa (ISPA). 1 To date, TAV can rely on total financing of some €30 billion (from ISPA, of which about one third has already been made available) plus €5 billion in pre-ISPA financing.

The TAV project has received new impetus under the Objective Law. The latter has helped reduce implementation delays, which used to be very long. For example, for the Turin-Novara connection (some 90 Km), the project design stage required 6 years, even more than actual construction (5 years, to be completed in early 2006).

When operating, TAV will not produce cash receipts sufficient to cover its debt service payments. TAV will repay its loans over the period 2009–2043 via fixed payments (“canone di esercizio”). According to the 2003 Budget Law (article 75), in order to safeguard ISPA’s economic and financial balance, the state will integrate debt service costs that cannot be compensated by using the cashflow receipts from TAV; according to estimates provided by TAV, the state contribution will need to cover about half of these costs.2

In principle, debt contracted by ISPA and onlent to TAV would not be counted as government debt. However, Eurostat decided in May 2005 that ISPA’s debt contracted to finance TAV has to be included in government debt, as ISPA was found not to be carrying any risk, due to a state guarantee on RFI operations.

Infrastrutture Spa (ISPA) is a financial intermediary created in 2001 and owned by the Cassa Depositi e Prestiti (see below). Its mandate is to provide long-term lending to help finance major infrastructure projects jointly with private sector companies, either directly or indirectly via the issuance of state guarantees.

C. PPPs: A Viable Alternative to Public Investment?

9. In Italy, infrastructure projects have traditionally been financed by the state; PPPs were formally established only recently. Although concessions, under which the private sector builds infrastructure assets and operates them only for a number of years, have existed since 1929, PPPs were formally established in 1998, when a series of amendments was introduced in the main framework law on public works (Box 4).

Box 4.The legal framework for PPPs in Italy

The 1994 Merloni Law represents the main legal framework for private sector participation in the construction and operation of public infrastructure. This law (Framework Law for Public Works 109/94, amended by Law 415/1998 and, more recently, by Law 166/2002) establishes concessions as the main contractual vehicle for the formulation and execution of a project and the provision of the related public services by the private sector.

Under Italy’s regulations, there are two main types of concessions:1

  • Concession under public initiative, where the public sector solicits the participation of the private sector in a project that has been selected and designed by the public administration (article 19);

  • Concession under private initiative, where the “sponsor” (“promotore”) also initiates a project proposal and related design (article 37bis, introduced in 1998).

Both types of concessions are based on build-operate-transfer (BOT) schemes. Under both cases, the law mandates that each project be included in a (central or local) government’s three-year investment plan and be based on a financial plan prescribing implementation methods, time requirements, financing and other factors connected with managing the project.

The legal framework has evolved over time. The law originally limited the public sector cash contribution to 50 percent of the total cost of a project; and a concession could not exceed 30 years. Both limits were eliminated in 2002, thus allowing more flexibility in undertaking projects—for example, the 50 percent limit had prevented the government from seeking PPPs in “accommodation services” (such as hospitals and schools), which by their nature are not amenable to generating fees from third parties receiving the related services. Under the revised legal framework, the government can now integrate the private investor’s remuneration by paying service fees to the private partner.

In addition to concession, traditional procurement is the other main typology of public works contracts, where the investor is in charge of formulation, construction, and financing of a project, without any involvement in its subsequent management. While both procurements and concessions require tendering procedures, public projects of small amounts (the so called “lavori in economia”) can be assigned without tendering.

10. At present, Italy’s PPP program remains small, although it is growing. This is in line with trends in other European countries, where, with the exception of the United Kingdom and Portugal, PPPs are growing but remain limited to date.5 In Italy, from a mere €0.3 billion in 2000 (the first available year of data), projects called for bidding had grown to €2.4 billion (0.2 percent of GDP) in 2004—when projects under consideration reached €8.5 billion. The “mortality rate” in PPPs is very high: in most cases, procedures are started but not followed through or remain pending (Ricchi, 2004).6 There are several reasons this could happen: for example, if no proposal is received from the private sector; proposals received are not deemed worthwhile by the awarding authority; or poor planning leads to the inability to carry through the necessary procedures to undertake the project. This explains why, out of an already relatively limited base of proposals, less than half actually get acted upon: over the period 2000–2004, the cumulative total amount of projects called for bidding was €9.8 billion, out of €22.8 billion of PPPs considered. As a result, the share of PPPs in the market for public works remains low, at around 10 percent.

11. There are signs, though, that procedures are being expedited and PPPs could be increasingly used. In the first half of 2005, the projects called for bidding (€2.8 billion, 0.3 percent of GDP) exceeded for the first time the new proposals under consideration (€2 billion), pointing to some catching up. Transportation and “public services” (mostly hospitals) account for 47 percent and 38 percent of contracts over 2000–2003, respectively. Water supply, environment, and utilities make up most of the balance.

12. Reflecting the potentially increasing importance of PPPs, the mandate of a dedicated PPP unit at the Ministry of Economy and Finance has been expanded. Created in 1999, the Unità Tecnica Finanza Progetto (UTF) had an original mandate covering mainly consulting services (technical, legal and financial) to public entities that intended to implement PPPs. Since 2002, public entities are required to secure UTF assessments when assigning feasibility studies relative to projects exceeding €10 million. For projects exceeding €50 million, UTF needs to be consulted to assess the bidding documents for concessions and related offers from private operators. Jointly with other public and private agencies, the UTF also keeps a database of PPP projects.7

13. On the financing side, the Cassa Depositi e Prestiti (CDP) will likely take on an increasing role. In operation since 1850, the CDP has traditionally been the main financier of local governments’ investment projects, using funds collected through the postal savings system.8 Since its transformation into a shareholding company in 2003 (with 70 percent of its capital retained by the government), CDP operations have been divided in two groups:

  • Separated management (gestione separata), which encompasses the traditional financing operations.

  • Standard management (gestione ordinaria), where financing is granted to private companies that carry out public service projects.9

So far, the CDP has undertaken about 10 operations under the latter, totaling €10 billion, including the highway Reggio Calabria-Salerno, the expansion of the San Raffaele hospital in Milan, the light train in Florence, and a waste disposal system in Sicily. As these operations require different accounting rules, gestione ordinaria was activated only in January 2005. Given that the CDP enjoys sizeable liquidity, it is likely that its role in this market will expand. Its activities will need therefore to be transparently reported and monitored.

14. To date, recording of PPP projects is incomplete, focusing mainly on larger (central government) projects. PPPs have so far been small and fragmented across local governments, which makes keeping track of them challenging in the absence of standardized reporting requirements. There is no obligation to record them in a consistent format. The UTF, in its advisory role for feasibility studies, has information on most of these operations; however, proper evaluation of the risks connected with PPPs is very complex and is not done in a systematic way. The national statistical agency (ISTAT) has started work in this regard, in cooperation with CIPE and UTF; and a new monitoring project supported by the ministry of health and UTF is being set up to gather information on PPPs in the health sector.

15. Given Italy’s fiscal situation, large projects have attracted (and will continue to attract) attention and are therefore more likely to be properly recorded. The recent experience with TAV is telling in this regard (Box 3 above). However, as PPPs take hold, there is a need to capture systematically possible fiscal risks in budget reporting. Box 5 highlights some general principles for doing so.

16. There is also a general need to improve project monitoring. At the level of local administrations, there is a tendency to start many projects, without prioritization or due consideration for financing requirements. In this regard, the eventual introduction of unified code for public projects (CUP, codice unico di progetto di investimento pubblico) within a computerized and standardized system of recording of all cash transactions (SIOPE) would help administrators keep track of existing projects. By providing a powerful monitoring mechanism for public projects (for example, by signaling when projects are not moving ahead), CUP will also serve as an instrument to enhance accountability.10 As SIOPE is implemented, the authorities intend to proceed with the introduction of CUP.

Box 5.Some General Principles for Proper Accounting of PPPs

Should PPP-related assets and liabilities be recorded on or off a government’s balance sheet? According to a 2004 Eurostat decision, PPI projects should be classified as non-government assets and recorded off balance sheet for the government under two conditions: the private partner bears the construction risk; or the private partner bears either availability or demand risk. This simple “on-budget/off-budget” treatment (which was partly dictated by the need to ensure comparability across 25 member countries) may nonetheless create strong incentives to design projects to “pass” the Eurostat test, allowing them to be recorded off-budget, rather than to gear the design of projects toward the most efficient and appropriate allocation of risk. In other countries, decisions are based not just on the legal form but also on economic substance.1

Based on whether or not a PPP is on or off balance sheet, what is its accounting treatment? Accounting practices and guidelines for PPPs vary, but the basic principle is that the government should ensure that both immediate and longer-term effects of its transactions, and any resulting assets, liabilities, gains or losses, are accurately represented to allow for a proper assessment of the fiscal position. This will affect both stocks and flows:

  • Adjusting debt stocks for concession-related debt. To the extent that concession contracts stipulate a certain risk transfer to the private sector, as set out by Eurostat, the debt that is contracted in the context of a concession will be counted as a private sector obligation that does not add to the public sector debt. If this risk transfer is not achieved, for example because the public sector retains part of the demand and/or availability risk, the debt that is contracted will need to be counted as public sector debt although it is formally an obligation of the private sector. The corresponding investment should also be shown as public investment, and the corresponding financing as government borrowing.

  • Adjusting revenues and expenditures for concession-related cash flows. Both contractual and contingent payments by the government should be counted as primary spending in the annual budget proposals and medium-term fiscal projections.

An example is the UK Accounting Standards Board, 2004, Financial Reporting Standard 5,

17. While PPPs may result in some current savings, they may imply significant future costs. Renegotiations of PPPs offer a telling example. This aspect should be carefully considered when entering PPP contracts. The experience shows that most concession contracts are subject to extensive renegotiations (Guasch, 2004). While these can in principle be a useful instrument for addressing contract shortcomings, their high incidence (and cost for the government) suggests opportunistic behavior of concessionaires.11 On average, renegotiations tended to favor the private-sector operators, who were able to secure increases in tariffs and increases in the number of cost components with an automatic pass-through of tariffs (some 60 percent of all cases), delays and decreases in investment obligations (some 70 percent), and decreases in the annual fee paid by the operator to the government (some 30 percent).

D. Conclusions and Policy Recommendations

18. While financing constraints have put a brake on public investment in Italy, the main challenges lie elsewhere. In fact, the evidence suggests that too many projects are being started, not too few (as shown by the results of reports from the Court of Auditors, the Services of the Chamber of Deputies, and other observers). The significant delays accumulated in most projects suggest that even when financing is available, projects are set up without due consideration of possible procedural aspects and insufficient coordination among involved entities. The share of projects subject to litigation—leading to delays and costly penalties—is witness to that. Once projects are executed, lack of consistent recording and reporting hampers an assessment of investment plans—this also applies to projects with higher visibility, such as those defined to be of strategic importance under the Strategic Infrastructure Program.

19. Initiatives promoting the use of PPPs in infrastructure investment may increase the efficiency of public spending in Italy. However, these should be implemented only when they are reasonably likely to result in a balanced allocation of risks, and not to circumvent budgetary restrictions. A number of steps would facilitate project selection, assessment, and monitoring.

  • Project selection and assessment. As PPPs may involve significant fiscal risks, government guidelines on risk transfer to the private sector and value for money assessments should be developed. A decision on whether a project should be undertaken as a direct government investment or as a concession would need to involve a cost comparison. This can be done with different techniques, such as developing a public sector comparator (PSC) or shadow bids. A PSC would show the cost of direct public provision, and could be used to benchmark private sector bids for concession contracts.

  • Reporting and disclosure. Guidelines for the disclosure of concession contracts and reporting on key contract requirements should be implemented.

  • Assessment of fiscal risks. PPPs (and some public projects, such as TAV) may give way to significant government obligations, some of which may be less evident as they fall due in the future. For contingent obligations (e.g., minimum revenue guarantees provided by the public sector), it will be important to assess the expected value of the obligations. When contingent liabilities associated with PPP projects cannot be reliably quantified, the emphasis should be on scenario analysis corresponding to alternative degrees of risk exposure of the government.

  • Recording of fiscal risks. PPPs should be transparently recorded, and the associated contingent liabilities should be included in budget documentation.

20. The government is already moving along some of these lines. As the Court of Auditors’ report rightly acknowledges, the government intends to implement more detailed and coordinated monitoring of public projects. In this regard, the unified code for projects (CUP) seems promising; its implementation should not be unduly delayed. As part of this monitoring, information on costs related to litigation and conflict resolution should also be included. As fiscal decentralization is implemented and more responsibilities are transferred to local governments, this will be all the more important to ensure accountability.

21. Finally, while it may be tempting to focus on highly-visible projects, smaller projects may sometimes offer higher payoffs—and lower risks. The steps identified above would help better prioritize across projects, ensuring that scarce resources are allocated in the most efficient manner.


Prepared by Annalisa Fedelino (FAD).

For example, the Medium-Term Economic Program (DPEF 2006–2009) issued in July 2005 states that “the endowment of infrastructure is below that of other European partners” and “investing in infrastructure projects […] is an absolute priority for economic policy” (page 36). The report is available at–2009/DPEF_2006–2009.pdf. These objectives were repeated in the December 2005 update pf Italy’s Stability Program.

IMF (2004) discussed these trends and issues in more detail.

Servizio Studi Camera dei Deputati (2005) and Corte dei Conti (2005). See also Virno (2005).

Välilä and others (2005). In the EU, the UK accounts for almost 70 percent of the signed value of all PPP contracts (one quarter is accounted for by the London Underground project alone); Portugal accounts for an additional 10 percent of the signed value of all PPP contracts, and the rest of the EU for the remaining 20 percent. Outside the UK, PPPs in the transportation sector (in particular, roads) are dominant, and the median contract size ranges from €100–500 million. In both the UK and Portugal, annual investment through PPPs represented some 15–30 percent of total public investment during 1995–2003. In all other EU countries, PPPs make up a small portion of total public investment.

Available information does not allow to distinguish between projects that have been dropped and projects that are still languishing.

Data is availabe at

The CDP accounts for a significant share of local governments’ financing: including regions, the share is above 40 percent; including only municipalities and provinces, the share is over 70 percent. For small entities, the CDP is the only source of financing.

These functions were codified in the law that transformed CDP into a shareholding company, although their names seem to have been swapped—unless it was the intent of the legislator to elevate eventually the financing of private sector’s operations to the CDP’s main area of activity (standard management).

A 1999 law established a monitoring system (MIP) and database for public projects; and a 2002 CIPE deliberation regulates procedures for the CUP.

About 55 percent of all concession contracts in the transport sector and 74 percent of all contracts in the water and sanitation sector get renegotiated. In the transport sector, these renegotiations occur after an average of 3.1 years, while in the water and sanitation sector they occurred after only 1.6 years. Most renegotiations (85 percent) occurred within 4 years of the original contract award—for concessions that were supposed to run for 15–30 years.

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