Fixing the time trap: fair PPP concession renegotiation via asset valuation and traffic regression

Infrastructure development is paramount for economic growth and improved quality of life. However, constrained government budgets often impede the ability to meet escalating infrastructure demands solely through public funding. To overcome these fiscal limitations, public‐private partnership (PPP) arrangements have been widely adopted globally as an alternative financing model. While numerous PPP projects have yielded positive outcomes, persistent challenges remain—particularly in the long-term management of concession agreements over extended project lifespans. A pervasive issue is the frequent renegotiation of PPP contracts, often resulting in imbalances in safeguarding the interests of private investors, public authorities, and taxpayers. A critical limitation of current practice is the absence of a clear, objective methodology for determining concession periods during such renegotiations. This study addresses this gap by introducing a novel model for recalibrating concession durations, leveraging residual asset valuation and traffic volume forecasting via regression analysis as key determinants. By quantifying residual infrastructure asset value and forecasting traffic patterns, the proposed model establishes a more transparent and equitable foundation for concession period renegotiations. This approach is expected to mitigate conflicts, strengthen stakeholder trust, and ensure a more balanced distribution of benefits throughout the PPP project lifecycle.