Dealing with information asymmetry in public-private (PPPs) negotiations
Asymmetry of information is present between private and public sector businesses. Private companies have greater knowledge and experience on the specific investments projects they are interested than the public ones. There are number of critical institutional constraints: limited knowledge on deeply understanding of financial and legal implications; inadequate institutional arrangements compared with best international practices; ineffective communications between sectors. Multicriteria and Cost Benefit Analysis facilitate a more transparent deliberation between partners. To prevent growing of asymmetrical information it is important to apply knowledge-sharing processes. To help them learn more and understand better the costs and benefits, it is useful to develop user-friendly interactive financial tools (e.g. just in simple spreadsheets) with detailed and visual explanations of most critical results.
The financial sustainability of projects
There is a need to complement socioeconomic appraisal methods (from the point of view of the whole society) with financial Cost-benefit analysis (from the point of view of the different stakeholders). In this sense, we consider the Stakeholder/Effects Matrix proposed by the RAILPAG appraisal method developed by M. Turró at the European Investment Bank (EIB, 2014) as a relevant reference for presenting financial and socioeconomic appraisal in an integrated and consistent manner.