Risk-Sharing in Highway Concessions: Contractual Diversity in Portugal
ABSTRACT 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: The construction and maintenance costs of a road network can be financed in part through public funding and in part by imposing tolls on some of its roads. This paper proposes a method for calculating road tolls which determines a partitioning of the costs burden between motorists and public financing such that social welfare is optimised. The method involves solution of an optimisation problem with an equilibrium constraint, for which an algorithm is proposed. An application to a real case is presented, and the results show that the optimum tolls are independent of the fixed costs of the road sections on which they are imposed, whereas they depend heavily on the marginal costs of public funds and the willingness of motorists to pay. If both these parameters are high, the optimal toll revenue collected on a road may result to be higher than actual road costs, so that the consequent surplus toll revenues can be made available to uses other than the road on which the tolls are collected.Transportation Research Part B Methodological 02/2002; 36(5):471-483. DOI:10.1016/S0191-2615(01)00016-9 · 2.94 Impact Factor
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ABSTRACT: The paper aims at revealing why institutions like public–private partnership (PPP) Task Forces have an impact on the realisation of PPP projects and the achievement of Value for Money in PPPs. The paper is based on a survey looking at PPP frameworks in the international context. The need for a specially created PPP Task Force is viewed from an institutional economics perspective. The survey highlights the impact of Task Forces on the implementation of PPP projects in Germany and features their influence on the procurement process and the achievement of Value for Money. The lessons derived from the analysis facilitate better practices of PPP Task Forces to realise more PPP projects.International Journal of Project Management 10/2006; DOI:10.1016/j.ijproman.2006.07.002 · 1.53 Impact Factor
Article: Private Financing of Toll Roads