How sustainable is private financing of public infrastructure?

Background
Over the last few years, the public authorities have experienced increasing difficulty in financing new infrastructure. In parallel, there has been a trend to make greater use of private sources of finance for the development of types of infrastructure which have hitherto been the responsibility of the public sector (airports, stadia, covered car parks, etc.). Specialist infrastructure and real estate funds, with a presence on the financial markets, are making determined efforts to establish themselves in this sector. Normally, these funds are managed with a view to producing profits in the relatively short term.What impact do these criteria have on the sustainability of the infrastructure concerned?

Objectives
Public investors, traditional private real estate investors and investors in the financial markets all have different priorities and motivation. It is important that town planners and developers grasp this fact in order to learn better ways of working together towards the goal of sustainable development.

Methods
Between six and eight case studies will be analysed, covering stadia, shopping centres, etc. – including both those already completed and others still in the project phase – in order to gain a better understanding, from the standpoint of sustainability, of the differing approaches of public investors, traditional private investors or publicly quoted private sector investors. A particular attempt will be made to understand how and in what conditions the sustainability of infrastructure can be either compromised or enhanced. The analysis will look at the methods used to finance the various components of projects, as well as the solutions found to sensitive issues in terms of sustainability (for example the conditions for the parking of motor vehicles).

Significance
Financial markets have become one of the main avenues for the financing of economic activity. Only a few assessments of the impact of this change on the sustainability of infrastructure have been made in Anglo-Saxon countries. This study will be the first to address the question in Switzerland. It should reveal the most appropriate financing structures in terms of the sustainability of the urban infrastructure.