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Efficiency of Soft Toll Method(BTO+Shadow Toll) for Public-Private Partnership Projects

Kim, Do-Il 1 Kang Dongseok 2 김윤식 1 Hyun Chang Taek 1

1서울시립대학교
2한국개발연구원

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ABSTRACT

Korean Public-Private Partnership, mainly implemented using BTO and BTL methods, has contributed in increasing benefits of the people by providing the needed public services in a timely and efficient manner. It has also induced flexible national fiscal management. However, changes in business environment including recent financial crisis aggravated financial situation in pursing PPPs, resulting in significant contraction of BTO projects. Risks in Public-Private Partnership (PPP) is a variable which would cause the project circumstances to differ from those assumed when assessing the project cost and benefits. Those parties that are in the best position to manage and mitigate the risk should bear the risk, and well incentivized risk sharing mechanism would lead to the optimum Value for Money. This study provides recommendation for using a Soft Toll method, which seeks for an appropriate level of risk allocation between the parties and provides results of case application. The policy advice delivered through the study is expected to contribute in reinvigorating the stagnated Korean PPPs.

Citation status

* References for papers published after 2022 are currently being built.