Road Infrastructure Concession Practice in Europe

Abstract

In a road infrastructure concession, a public authority risk. And the commercial risk is sometimes too great to grants specific rights to a private or semi-public company be carried by the concession company alone. Commercial to construct, overhaul, maintain, and operate risk should be controlled by mechanisms incorporated in infrastructure for a given period. By contract, the public the contract, but control of the commercial risk must not authority charges that company with making the eliminate incentives.investments needed to create the service at its own cost In addition to safeguarding the community's interests, and to operate it at its own risk. The price paid to the the public concession authority must increase citizen company comes from the service's users, the public awareness about concession decisions, to ensure their authority, or both. social acceptability. In 1999, out of roughly 51,000 kilometers of Formulas for determining toll charges differ through European motorways, about 17,000 kilometers ( 33Europe. So do criteria for selecting concession percent) were concessioned-16,400 kilometers by toll companies. In 1999, the main criteria used were these: and 670 kilometers by shadow toll (design, build, * The amount of public subsidy required. finance, and operate arrangements). Of these, 73 percent * The credibility of the financial arrangements. are managed by the public sector and 27 percent by * The project's technical quality. private companies. State-owned companies have been * The operating strategy and price policy. important in European motorway concessions.* The reputation of the concession company (whether Systems vary among countries, for example, in how it has a construction company among its shareholders, they share risks between the concession authority and the for example). concession company. As the motorway network hasThe increasingly frequent use of private funding must grown denser, attributing commercial risk has become be taken into account when defining the training more difficult. Increasingly, public authorities must play required by personnel responsible for monitoring the a greater regulatory role. Already, bad experiences have concessions.

Motorways economic regulation: A worldwide survey

“…Concerning Europe, Bousquet and Fayard (2001) Queiroz and Kerali (2010) reviews the institutional arrangements for road asset management. Brown et al (2006) provide guidance on conducting independent and public evaluation of regulatory systems for infrastructure sectors.…”

Design and evaluation of road pricing: state-of-the-art and methodological advances

“…Nevertheless, the highway toll rates practically depart from the optimal price and may require subsidy so that the marginal cost of their use equal their operations and maintenance costs. In order to cut public expenses, raise new funding sources and enhance highway performance in both efficiency and equity grounds [128], deregulation and privatization mechanisms, such as Build-Operate-Transfer (BOT) concession schemes designed by Private-Public Partnerships (PPPs), are gradually adopted in several countries worldwide, like in Europe [46], South America [269] and South East Asia [387]. In such cases, pricing schemes may follow industrial organization principles, such as that of access pricing in a natural monopoly with competitive services [202].…”

Transformaciones en el Rol del Estado. La Concesión de Redes Viales en Argentina

“…Otro elemento a considerar se vincula con el tipo de remuneración que puede darse a los concesionarios, ya sea que el pago del peaje lo realicen los usuarios o la autoridad pública (shadow toll). A estos dos tipos que reconocen Bousquet y Fayard (2001) sería posible agregar un tercero, el subsidiado, en el cual se combinan los dos primeros, ya que al pago de peaje por el usuario del servicio se suma el aporte estatal (establecido, por ejemplo, en función del tránsito existente). Así, dos aspectos aparecen vinculados con la concesión: 1) la transferencia del riesgo, de la autoridad pública a una prestadora y; 2) la noción de globalidad contractual, involucrando todos los aspectos vinculados a la operatoria de la infraestructura.…”