“This paper presents three alternative incentive structures for PPP contracts that can potentially benefit both public-sector sponsors, by delivering higher quality per dollar, and private investors, by generating attractive returns. The rate of return model, price cap model, and ‘sharing’ model all apply principles from the regulation of privately-owned energy and telecom infrastructure to PPP projects that generate user fees. In addition, these alternative risk- and profit-sharing approaches may create choices that are attractive to investors and sponsors with risk preferences and return expectations not accommodated by more commonly used models. By expanding the options for sponsors and investors to consider in PPP negotiations, these incentive structures have the potential to increase the number of PPP deals and improve the odds of the projects’ long-term success.”