Filling the gap in urban transport [EBRD - Working papers].pdfVIP

ab0cd Filling the gap in urban transport: Private sector participation in transition countries Zbigniew Kominek Abstract This paper reviews private sector participation (PSP) in urban transport services in central and eastern Europe and the Commonwealth of Independent States. It documents how the private sector is stepping in to address gaps caused by failing public services in poorer countries and identifies a strong negative relationship between GDP per capita and the degree of PSP. It also shows that, when controlling for the resource constraint, there is a positive relationship between the degree of PSP and the general reform process. The paper adds to international experience on the importance of fiscal factors in privatisation. It highlights that short-term constraints often push authorities to make decisions on private sector involvement without a full cost-benefit analysis and without the support of a developed regulatory framework. Keywords: Private sector participation, urban transport, transition economies JEL Classification Number: L92, P25 Address for Correspondence: European Bank for Reconstruction and Development, One Exchange Square, London EC2A 2JN, UK. Phone: +44 20 7338 7381; Fax: +44 20 7338 6110; E-mail: KominekZ@ Zbigniew Kominek is an economist at the EBRD. The author is grateful to Gordon Hughes, Andre Maier and Toshiaki Sakatsume, the co-authors of Chapter 4 of the 2004 EBRD Transition Report, which formed the basis of this research. He is also grateful to the EBRD’s Municipal and Environmental Infrastructure Team, particularly Guido Bruggeman and Philip Cornwell, for sharing their useful experiences. The helpful comments of Jose Carbajo, Alex C