IDEAS home Printed from https://ideas.repec.org/a/tpe/jtecpo/v40y2006i3p359-381.html
   My bibliography  Save this article

Traffic Risk Mitigation in Highway Concession Projects: The Experience of Chile

Author

Listed:
  • José M. Vassallo

Abstract

Traffic risk mitigation remains a challenging aspect of highway concessions. This paper evaluates three mechanisms applied in Chile to mitigate traffic risk: the 'Minimum Income Guarantee' (MIG); the 'Least Present Value of the Revenues' (LPVR); and the 'Revenue Distribution Mechanism' (RDM). Specifically, the paper focuses on the performance of LPVR and MIG during the economic recession that took place between 1998 and 2002. In the context of this recession, the paper explains the reasons that led the government to implement the RDM mechanism. The paper gives some guidelines about the applicability of these mechanisms in other countries, highlights the beneficial features of LPVR in reducing traffic risk and avoiding concession contract renegotiations, and finally provides some recommendations as to how to make LPVR more attractive to private promoters. © 2006 LSE and the University of Bath

Suggested Citation

  • José M. Vassallo, 2006. "Traffic Risk Mitigation in Highway Concession Projects: The Experience of Chile," Journal of Transport Economics and Policy, University of Bath, vol. 40(3), pages 359-381, September.
  • Handle: RePEc:tpe:jtecpo:v:40:y:2006:i:3:p:359-381
    as

    Download full text from publisher

    File URL: http://www.catchword.com/cgi-bin/cgi?ini=bc&body=linker&reqidx=0022-5258(20060901)40:3L.359;1-
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Babatunde, Solomon Olusola & Perera, Srinath, 2017. "Analysis of traffic revenue risk factors in BOT road projects in developing countries," Transport Policy, Elsevier, vol. 56(C), pages 41-49.
    2. Iseki, Hiroyuki & Houtman, Rebecca, 2012. "Evaluation of progress in contractual terms: Two case studies of recent DBFO PPP projects in North America," Research in Transportation Economics, Elsevier, vol. 36(1), pages 73-84.
    3. Vassallo, José Manuel, 2010. "The role of the discount rate in tendering highway concessions under the LPVR approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(10), pages 806-814, December.
    4. Alexander Moore & Stéphane Straub & Jean-Jacques Dethier, 2014. "Regulation, renegotiation and capital structure: theory and evidence from Latin American transport concessions," Journal of Regulatory Economics, Springer, vol. 45(2), pages 209-232, April.
    5. Diego Aycinena & Rimvydas Baltaduonis & Lucas Rentschler, 2014. "Valuation structure in first-price and least-revenue auctions: an experimental investigation," Experimental Economics, Springer;Economic Science Association, vol. 17(1), pages 100-128, March.
    6. Albalate, Daniel & Bel, Germà, 2009. "Regulating concessions of toll motorways: An empirical study on fixed vs. variable term contracts," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(2), pages 219-229, February.
    7. Tan, Zhijia & Yang, Hai, 2012. "Flexible build-operate-transfer contracts for road franchising under demand uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 46(10), pages 1419-1439.
    8. Viegas, José M., 2010. "Questioning the need for full amortization in PPP contracts for transport Infrastructure," Research in Transportation Economics, Elsevier, vol. 30(1), pages 139-144.
    9. Beria, Paolo & Ramella, Francesco & Laurino, Antonio, 2015. "Motorways economic regulation: A worldwide survey," Transport Policy, Elsevier, vol. 41(C), pages 23-32.
    10. repec:eee:crpeac:v:27:y:2015:i:c:p:189-208 is not listed on IDEAS
    11. repec:eee:transb:v:102:y:2017:i:c:p:105-123 is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpe:jtecpo:v:40:y:2006:i:3:p:359-381. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum). General contact details of provider: http://www.bath.ac.uk/e-journals/jtep .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.