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Concesiones de plazo variable para la construcción y explotación de autopistas
[Variable-term concessions for road construction and operation]

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  • de Rus, Gines
  • Nombela, Gustavo

Abstract

Private sector participation in infrastructure projects traditionally financed by governments (roads, airports, seaports) is increasing around the world. This paper describes how a toll road concession works. It discusses how the usual mechanism, based on a concession contract with a pre-determined fixed term, and a selection process of concessionaires through minimum-toll auctions, does not lead to optimal outcomes. In particular, it is shown how this type of mechanism in fact lies behind the frequent concession contract renegotiations observed in practice. A new mechanism is proposed, based on a flexible term concession, which is adjusted according to the actual traffic level using the road, and an auction with bids for total net revenue and maintenance costs. This new mechanism eliminates traffic risk from toll road concessions, and it guarantees an effective selection of the most efficient concessionaires.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 12653.

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Date of creation: 2003
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Handle: RePEc:pra:mprapa:12653

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Related research

Keywords: roads; highways; franchising; concessions; auctions;

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  1. Newbery, David M, 1989. "Cost Recovery from Optimally Designed Roads," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 56(222), pages 165-85, May.
  2. Eduardo M. R. A. Engel & Ronald D. Fischer & Alexander Galetovic, 2001. "Least-Present-Value-of-Revenue Auctions and Highway Franchising," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 109(5), pages 993-1020, October.
  3. Engel, Eduardo & Fischer, Ronald & Galetovic, Alexander, 1997. "Highway Franchising: Pitfalls and Opportunities," American Economic Review, American Economic Association, American Economic Association, vol. 87(2), pages 68-72, May.
  4. Antonio Estache, 2001. "Privatization and Regulation of Transport Infrastructure in the 1990s'," ULB Institutional Repository, ULB -- Universite Libre de Bruxelles 2013/43998, ULB -- Universite Libre de Bruxelles.
  5. Hinojosa, Sergio & Gomez-Lobo, Andres, 2000. "Broad roads in a thin country - infrastructure concessions in Chile," Policy Research Working Paper Series, The World Bank 2279, The World Bank.
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