Public - Private Associations in Mexico. Financing and Social Benefits in Road Infrastructure Projects

Abstract

Public Private Partnerships in Mexico have become an alternative financing strategy for infrastructure development; thus, for the economic development of the country, mainly in the road sector. However, the operation of these Partnerships has caused controversy due to failed experiences that have exposed relevant deficiencies or areas of opportunity such as the lack of involvement of society and insufficiency of transparency mechanisms, which are presented in the forming of the weighted Average Cost of Capital, as well as in accountability. This study analyses the contribution of Public Private Partnerships to the social and economic development of the country, as well as their feasibility to become a sustainable alternative for the development of road infrastructure in Mexico. The obtained results show that Public Private Partnerships partially support the development of the road sector in the country, due to the fact that private sector centers its efforts in the search of profitability putting aside the quality of the assets and social benefit.