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Oxera’s key takeaways from the International Railway Congress 2019


On 19 March, Oxera participated in the International Railway Congress 2019 in Vienna. The Congress was attended by over 500 international guests, including representatives from more than 100 well-known companies and over 20 countries.

Partner Andrew Meaney, head of Oxera’s Transport team, delivered a presentation on the models of private financing for rail infrastructure. The presentation compared PPP, Concessions and RAB models and touched on the issue of balance sheet treatment in cases of government involvement. The recording of the presentation can be accessed here and the slides here.

Given the different drawbacks of the financing models, regulators and finance providers must thoroughly assess each project in order to choose the best option. Factors affecting this choice include the extent of potential efficiency gains, strict commitment from private and public sector to the chosen course of action, the degree of model flexibility, and risk allocation between State and private investor.

The question of risk allocation leads to another important topic—the balance sheet treatment of the scheme. Depending on the amount of risk transferred to the private sector and overall contractual terms, the government may have to treat the liability as public debt. This creates additional pressure on the State, due to the restrictions on public borrowing under the terms of the Stability and Growth Pact.[1] Overall, the choice of the financing model for railway infrastructure has to be approached with caution and analysed in detail on a case-by-case basis.


Contact: Andrew Meaney
[email protected]


[1] European Commission, ‘Stability and Growth Pact’, https://ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/eu-economic-governance-monitoring-prevention-correction/stability-and-growth-pact_en.