Resumen de Innovation and Tariff-adjustment Options in Public-private Partnerships

Carlos Contreras, Julio Angulo

• This paper explores the question of whether the inclusion in PPP contracts of options to adjust economic conditions in the face of technological changes may help the adoption of such innovations, while reducing the opportunity cost for governments. In the model proposed a grantor government reserves the right to cut its payments to the concessionaire when the concession’s costs are reduced because of the implementation of technological innovations The paper is of interest given that digital transformation and robotization can generate relevant productivity improvements in areas where a significant part of the public budget is spent, such as healthcare and education services. By adopting a numerical example, this paper illustrates the application of the model to a school concession project.