Opportunities for the private sector to invest in public-transportation infrastructure through public-private partnerships are likely to be worth more than $330 billion from 2005 to 2010, accelerating a growth trend that began in the mid-1990s.1 But in some countries weak political commitment, a lack of appropriate regulatory safeguards, and poor project governance pose worrisome risks for investors.
The pipeline of public-transport projects requiring private capital, as McKinsey research shows, includes everything from new road and bridge construction in Germany to the expansion of ports in Eastern Europe and the extension of urban transit systems across Asia. While the planned projects cover all continents and modes of transportation, the biggest investment opportunities are in the United States, China, the United Kingdom, and South Korea. Greenfield road and rail projects account for the lion’s share of planned projects (Exhibit 1).
Exhibit 2 shows the breakdown by region and transportation mode.2 Globally, rail will account for 48 percent of the total value of projects, roads for 44 percent, seaports for 6 percent, and airports for 2 percent. Rail recently emerged as the largest mode by value: though...