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Broad Roads in a Thin Country

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dc.contributor.author Hinojosa, Sergio
dc.contributor.author Gómez-Lobo, Andrés
dc.date.accessioned 2015-07-21T14:48:15Z
dc.date.accessioned 2017-12-16T00:09:00Z
dc.date.available 2015-07-21T14:48:15Z
dc.date.available 2017-12-16T00:09:00Z
dc.date.issued 2000-01
dc.identifier.uri http://hdl.handle.net/10986/22265
dc.description.abstract To increase investment in infrastructure, in the early 1990s Chiles government introduced private capital into the transport infrastructure sector, covering roads and highways, bridges, tunnels, and airports. The chosen mechanism: a concession scheme through which private firms would finance and build a given project and then operate the infrastructure for a set of number of years, recovering their investment by collecting tolls from users. Among the lessons learned from the experience: 1) As much as possible, avoid concessioning roads for which there are convenient alternative freeways nearby. 2) Choose the right variable for awarding a concession. Avoid mechanisms that (by promoting large payments to the state or short-term concession periods) encourage high tolls, and if you choose to award a concession to the firm charging the lowest tolls, place a floor and ceiling on possible bids. The floor is to guarantee the concessions financial viability; the ceiling is to prevent inefficient traffic diversions. Ties at either end should be resolved by a second variable, such as the level of transfers between the state and the firm. 3) Allow downward toll flexibility so that the concessionaire can react to unexpectedly low traffic flows, especially for certain types of vehicles. 4) Pay special attention to the tendering mechanism and to the general incentive structure. There are limits to the pure least-present-value-of-revenue (LPVR) auction, but income guarantees do enhance liquidity. In fact, a minimum-income guarantee through an LPVR auction is an instrument for credit enhancement, not income support. Alternatively, some form of financial innovation should be encouraged to make debt service commitments more flexible. 5) If concessions are tendered by traditional methods and income guarantees will be given, cover only a fraction of the concessionaires expected income stream, to reduce the states financial exposure and to improve the incentives to the concessionaire. 6) Make the contracts as complete as possible but allow for later modifications or renegotiations, and include a well-designed dispute resolution mechanism. en
dc.language English
dc.language.iso en_US
dc.publisher World Bank, Washington, DC
dc.relation.ispartofseries Policy Research Working Paper;No. 2279
dc.rights CC BY 3.0 IGO
dc.rights.uri http://creativecommons.org/licenses/by/3.0/igo/
dc.subject TOLLING
dc.subject CONCESSION CONTRACT
dc.subject INTERNATIONAL AIRPORT
dc.subject PUBLIC EXPENDITURE
dc.subject SHADOW TOLLS
dc.subject NUMBER OF VEHICLES
dc.subject TRAFFIC SPEED
dc.subject PUBLIC WORKS
dc.subject ECONOMIC CONDITIONS
dc.subject ROAD NETWORK
dc.subject SAFETY
dc.subject CONCESSIONAIRE
dc.subject LOWER TOLLS
dc.subject EQUITY CAPITAL
dc.subject HIGHWAYS
dc.subject INJURIES
dc.subject BUSES
dc.subject ACCIDENTS
dc.subject DEBT
dc.subject ACCIDENT RATES
dc.subject TRAFFIC VOLUMES
dc.subject HIGHWAY
dc.subject MOTORCYCLES
dc.subject TRANSPORT INFRASTRUCTURE
dc.subject AXLES
dc.subject VANS
dc.subject PASSENGER TRAFFIC
dc.subject TOLL ROAD
dc.subject TRAFFIC FLOW
dc.subject CONSTRUCTION
dc.subject TRANSPORT
dc.subject CONGESTION
dc.subject TRAFFIC LEVELS
dc.subject ASPHALT
dc.subject SATURATION
dc.subject PICK-UP
dc.subject OPERATING COSTS
dc.subject PASSENGER
dc.subject DOMESTIC PASSENGERS
dc.subject UPPER
dc.subject HIGH RISK
dc.subject REVENUE SHARING
dc.subject ECONOMIC GROWTH
dc.subject CONCESSIONS
dc.subject SOCIAL WELFARE
dc.subject TRUCKS
dc.subject ROAD SAFETY
dc.subject CONCESSION SCHEME
dc.subject CONCESSIONAIRES
dc.subject FREEWAYS
dc.subject GOVERNMENT INTERVENTION
dc.subject BONDS
dc.subject WASTE WATER
dc.subject AIR TRANSPORT
dc.subject RANGE
dc.subject GOVERNMENT GUARANTEES
dc.subject GRAVEL
dc.subject ACCIDENT
dc.subject TOLLS
dc.subject BOTTLENECKS
dc.subject LEGAL FRAMEWORK
dc.subject PUBLIC FUNDS
dc.subject DEBT SERVICE
dc.subject BRIDGES
dc.subject PRIVATE SECTOR
dc.subject DEFICITS
dc.subject TRAFFIC ALLOCATION
dc.subject CARS
dc.subject INCOME
dc.subject TRAFFIC DIVERSION
dc.subject URBAN ROADS
dc.subject CONCESSION PERIOD
dc.subject CONCESSION COMPANY
dc.subject TRAFFIC
dc.subject PRESENT VALUE
dc.subject TOLL LEVEL
dc.subject AIRPORT INFRASTRUCTURE
dc.subject AIRPORT FACILITIES
dc.subject TUNNEL
dc.subject PENSIONS
dc.subject CITY ROADS
dc.subject CONCRETE
dc.subject PORTS
dc.subject WATER SUPPLY
dc.subject FINANCIAL INSTITUTIONS
dc.subject INFLATION
dc.subject TERMINALS
dc.subject ROADS
dc.subject PUBLIC RESOURCES
dc.subject FIXED COSTS
dc.subject REFERENCE
dc.subject TUNNELS
dc.subject TRAFFIC COUNTING
dc.subject TOLL ROADS
dc.subject AIRPORTS
dc.subject FINANCIAL STABILITY
dc.subject ROAD CONCESSIONS
dc.subject HIGH TRAFFIC
dc.subject FRAMEWORK
dc.subject CONSTRUCTION AND OPERATION
dc.subject PENALTIES
dc.subject REVENUE STREAM
dc.subject LAWS
dc.subject PASSENGERS
dc.subject HIGHWAY CONCESSIONS
dc.subject ROUTE
dc.subject VEHICLES
dc.subject FREIGHT
dc.title Broad Roads in a Thin Country en
dc.type Working Paper en
dc.rights.holder World Bank
dc.title.subtitle Infrastructure Concessions in Chile


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