Public-Private Partnership: the Project Financing for the realization of public infrastructures in Italy.

"In Italy there is a need to modernize and realize public infrastructures, but the decreasing public funds and the budget constraints make it difficult. In a Public-Private Partnership the public authority and the private operator decide to cooperate for the realization of a public work through the instrument of the Project Financing in which the investment, the execution and the management of the work are borne by the private operator. This cooperation allows the convergence of interests: the public side increases the public value through the realization or the improvement of the infrastructure, and the private entity recovers the investment and makes a profit thanks to cash flows coming from the management of the public work/service, for a time agreed in the contract. The paper analyses the complex regulatory framework starting from the European regulation up to the Italian discipline with emphasis on the recent Legislative Decree 50/2016 and its implications, proceeding with characteristics and operational aspects of PPP. Then, it describes the procedures to initiate a PPP in Project Financing and all documents involved in the operation with a deep analysis on the economic-financial plan, its construction starting from input data, its achievement of the balance and the evaluation of profitability and bankability ratios. Being an elaborate tool, the PPP has not often been fully understood and correctly used by the parties involved in the project, consequently generating several debates and critical issues on the topic. After a critical analysis, the presentation of a real case-study will follow, focusing on the construction and the assessment of the economic-financial plan, and highlighting some critical aspects of the project proposal by the private operator."