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A Berlusconi PPP horror movie
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A toll road. In one of the richest regions of Europe. Northern Italy. Lombardy. Industrial powerhouse. Traffic everywhere. What could possibly go wrong? The project was called the Autostrada Pedemontana Lombarda. A massive motorway designed to connect cities north of Milan and relieve congestion around the region. On paper, it looked like a dream. Economic powerhouse region. Millions of inhabitants. Constant truck traffic. Banks were queuing to through their money to the asphalt plant. Making reservations for parties in the best restaurants of Italy at RFQ stage… Nevertheless… Traffic forecasts were… let’s say… optimistic. Very optimistic. Ok… now, the interesting part… The road opened. And then reality arrived. Traffic was far below forecasts. Not slightly below. Dramatically below. The problem? Drivers had alternatives. Free roads. Existing highways. Local routes. And people did what people always do. They avoided paying. Tourists go on road trips through the best of Italy avoiding highways… Revenue collapsed… well… they never took off. Financing started to shake. Banks became nervous. Refinancing became necessary. Public money had to step in to stabilize the project. Because once a toll road is built, there is no easy way back. You cannot un-build a highway. So the nightmare started: Restructurings. Refinancing. Public guarantees. Political debates. Berlusconi. Then Mateo Renzzi… The classic PPP disaster cocktail. We see less of those projects today. PPPs where traffic forecasts are not forecasts. They are aspirations. Sometimes consultants build models that work beautifully in Excel. But drivers do not read Excel. They follow one simple rule: The cheapest and more convenient road wins. If you work in PPPs, remember this. Regional political ambition + heroic traffic forecasts + complicated financing = refinancing nightmare and collapse. If you don’t want to fail on the basics… click below. ​The 100 Q&A You Must Know about PPPs​ PD 1: If you liked this email, don't keep it in secret and forward it to a friend. They will thank you enormously one day. PD 2: If somebody has sent you this email and you want to receive emails like this yourself, visit vicentevalencia.com PD 3: If you want unsubscribe, click the link below. |
Vicente Valencia
I talk about Personal Growth, Management, Infrastructure and More | 👇JOIN +2k readers 👇
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