Access Holidays for Network Infrastructure Investment
The need for an access holiday to spur investment arises from the ex ante inability of regulators to commit to access prices that adequately reward investors for all relevant risks. A well designed access holiday can partially overcome the problem of regulatory commitment, and represents a second-best solution to this problem, by limiting regulatory intervention for a number of years. In this paper, we consider the underlying problem of investment incentives and access regulation. We also highlight precisely what an access holiday can and cannot do. In particular we highlight important practical issues that need to be considered regarding access holidays.
|Date of creation:||2003|
|Date of revision:|
|Publication status:||published in Agenda, Vol.10 (2003), pp.163-178.|
|Contact details of provider:|| Postal: Department of Economics, Monash University, Victoria 3800, Australia|
Web page: http://www.buseco.monash.edu.au/eco/
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- King, Stephen P, 1997. "National Competition Policy," The Economic Record, The Economic Society of Australia, vol. 73(222), pages 270-84, September.
- Joshua S. Gans & Stephen P. King, 2000. "Options for Electricity Transmission Regulation in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 33(2), pages 145-160.
- Joshua S. Gans & Stephen P. King, 2004. "Access Holidays and the Timing of Infrastructure Investment," The Economic Record, The Economic Society of Australia, vol. 80(248), pages 89-100, 03.
- Gans, Joshua S & Williams, Philip L, 1999. "Access Regulation and the Timing of Infrastructure Investment," The Economic Record, The Economic Society of Australia, vol. 75(229), pages 127-37, June.
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