At DMC we work on infrastructure projects in Europe and emerging markets to play a significant role in the development and operation of infrastructure businesses that provide basic services that are used everyday, such as power, communications, transport and water projects, with our main focus on the water sector.
Privatisation is changing the way governments do business around the world. Development franchises for constructing surface transportation infrastructure are one result of this trend toward greater private involvement in producing government services. As an extension of the services traditionally provided under construction contracts, franchises grant private firms a time-limited opportunity to finance, design, build, operate, and collect revenue from transportation facilities. At the end of the franchise period, usually after 20 years, the government acquires, free of charge, a transportation facility that it otherwise would have had to finance and operate with scarce public resources. This approach to project delivery has revolutionized infrastructure procurement in the developing world and is spreading to industrialised countries.
Public-private partnerships are not a panacea for government inability to finance all of the infrastructure the increasingly mobile public demands. Only projects with the largest and most certain net revenues successfully compete for the attention of investors. Development franchises are thus merely a supplement to public financing of less self-supporting transportation facilities. By allowing the public sector to focus its resources on developing otherwise unfinanceable projects, public-private partnerships help to fill the “infrastructure gap” between what the treasury can afford and what the public needs.
The challenge to the public sector is to attract as much private capital as possible while ensuring that the facilities they produce create benefits for the public at least as great as those developed by traditional means. The challenge to the private sector is to develop infrastructure projects that compete favourably with other investments in terms of lower risks or higher yields, and can be developed sooner.
A typical DMC project will involve a turn-key solution covering: