Risk Allocation for PPP Infrastructure Projects in Costa Rica

Costa Rica's lag in infrastructure is compromising its competitiveness among other countries of the region and the rest of the world. The Global Competitiveness Report 2014-2015 ranked Costa Rica in the 119th place among 144 countries. Currently the investment the country is doing in infrastructure is 1.1% of the GDP, whereas the required investment is 3.7%. To overcome this gap, the Government has used the concession model to develop important infrastructure projects. Nevertheless, the approach remains shy as only five projects, in almost twenty years, have been developed through this model. Furthermore, the projects given in concession have gone through a strong public opposition which concluded in the resignation of the project Corredor San José - San Ramón in 2013. The research shows that there is a relation between the risk allocation, the success of the projects and the value for money outcome. Therefore, this research aims to determine which are the actual practices related to risk allocation in Costa Rica and to know if they are in tune with the trends in the international practice.