Budgetary constraints are prompting many governments to encourage private financing of
transportation infrastructure through Public-Private Partnerships (PPPs). Fiscal support
measures have been often used to improve the financial feasibility of these projects, but also
to rebalance the economics of the contracts to compensate for changes imposed by the
government. This paper analyses the awarding of subordinated public participation loans
(SPPLs) to ten brownfield shadow-toll motorway PPPs in Spain after additional works were
imposed by the government. SPPLs are government loans, subordinated to the senior debt,
that were intended to facilitate the PPP contractors the financing of the aforementioned
works. This paper evaluates the financial and social impacts of the awarding of these loans
to three of these projects. To that end, the SPPL repayment capacity of the PPPs and the
social benefits derived from the improvement in road safety are estimated to evaluate
whether the government’s decision to support these projects was justified from a social
perspective. The results show that, although the government’s decision was reasonable, the
design of the SPPL and its awarding conditions should be improved to guarantee the public
interest.
