Costs and efficiency of highway concessionaires: a survey of Italian operators
AbstractMeasuring the productivity of highway concessionaires is very relevant, especially when a price cap regulation is applied where tariff increases are based on expected improvements of productivity. Output may be measured in terms of traffic or network length, or a combination of both, while quality of service should ideally be accounted for. To measure productivity we consider only operating costs, as amortization and financial costs depend upon the original highway design and historical costs. A cross section analysis of the Italian concessionaires shows that: 1) operating costs depend on both traffic and capacity; 2) economies of scale are relevant but their estimate is very sensitive to the model specification; 3) there are large differences in efficiency among operators, indicating that there could be significant room for yardstick competition. We subsequently consider the main economic data regarding the major Italian concessionaire (Autostrade spa) over two decades. Revenues increased greatly, even more than traffic, while operating costs remained substantially stable in real terms, as the automation of toll collection allowed the company to reduce the number of collectors by almost half. Finally, a comparison between Italian and French concessionaires shows that the latter have much lower operating costs, which cannot be entirely explained by economies of scale or lower personnel costs.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 36993.
Date of creation: 2008
Date of revision:
Highway; Regulation; Productivity; Price-cap;
Other versions of this item:
- Massiani, Jerome & Ragazzi, Giorgio, 2008. "Costs and efficiency of highway concessionaires: a survey of Italian operators," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 38, pages 85-106.
- R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
- L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems - - - Government Pricing and Policy
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