Risk-Sharing in Highway Concessions: Contractual Diversity in Portugal
Journal of Professional Issues in Engineering Education and Practice (Impact Factor: 0.28). 01/2012; 139(2). DOI: 10.1061/(ASCE)EI.1943-5541.0000131
Private sector involvement in road concessions has been one of the main options for governments to engage in large-scale road development plans. Political interference, optimism bias in demand forecasts and the absence of active regulators lead to frequent renegotiations of road contracts and large public remunerations to concessionaires. Because they are unable to deal with the increasing uncertainty in forecasts, governments are using availability payment schemes, which appear to be robust solutions that limit public losses. This paper evaluates the allocations of risk in four Portuguese road concessions under a contractual regulatory regime, discusses the types of incentive mechanisms used in each instance, and draws lessons from these case studies. This investigation reveals evidence indicating that although contracts are becoming increasingly complex over time, the public sector is assuming more production and commercial risks in the highway development process. DOI: 10.1061/(ASCE)EI.1943-5541.0000131. (C) 2013 American Society of Civil Engineers.
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ABSTRACT: During the last few decades, the motorways sector greatly expanded around the world. Today it represents an essential infrastructure asset of a country. In the majority of cases the network was initially built and maintained with public funds through direct state provision. In the early 1990s many developed and emerging countries moved towards private involvement in toll roads provision, increasing the need for sound economic regulation. However, no comprehensive analysis of the existing regulatory and institutional frameworks has been carried out so far. Starting from a survey involving 21 countries, the paper tries to fill in this gap through a review of existing motorway regulatory frameworks. Various aspects of regulation have been collected and analysed in order to provide an overview of the current practices, both in quantitative and qualitative terms evidencing the strengths and the weaknesses among the various models.Transport Policy 04/2015; DOI:10.1016/j.tranpol.2015.03.010 · 1.72 Impact Factor
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