The Rise and Fall of Brownfield Concessions
This chapter explains the fate of brownfield concessions. In the early 1990s, these public-private partnerships (PPPs) served briefly as the flagship of the global PPP movement, and were highly recommended by the development community as “privatization” solutions to many of the problems facing infrastructure utilities in low-income countries. These concessions involve the construction of new infrastructure assets to improve or extend existing facilities, but mostly focus on rehabilitation of existing assets. Theoretically, such projects should be relatively easy to do because risks associated with initial financing and construction are largely eliminated by the time a PPP contract is signed. But since the 1997 Asian crisis, relatively little investment has been generated by these projects. In the poorest countries, very few of these projects have been attempted and much of the related investment has actually come from governments or their development partners. What accounts for the rise and fall in popularity of brownfield concessions?