Financing transport infrastructure projects in Italy: a critical analysis of the main approaches

This paper aims at analysing the methodology used for financing large infrastructure projects in Italy. In particular, it focuses on the Italian highway sector, where in the last years many projects have been launched using new financial instruments. The paper discusses three of these “instruments”. The first one is the Project Financing, discussed starting from a general review, analyzing also the different typologies used, the risks involved and their allocation among the various subjects that take part in the PF mechanism. A special case concerns the recently introduced model used for the Italian highways, known as “PF with takeover compensation”. There are two other important mechanisms used for financing infrastructure projects in Italy: the exploitation of road demand rigidity and the spreading of the investment over the entire network, favouring larger concessions. We conclude that all these three mechanisms present deep flaws in terms of transparency and of contradiction with economic feasibility criteria (that have to dominate the public investment rationale).