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| Dosi, Cesare; Moretto, Michele. |
| We study the competition to acquire the exclusive right to operate an infrastructure service, by comparing two different specifications for the financial proposals - "lowest price to consumers" vs "highest concession fee", and two alternative contractual arrangements: a contract which imposes the obligation to immediately undertake the investment required to operate the concessioned service and a contract which simply assigns to the winning bidder the right to supply the market at a date of her choosing. By comparing the returns of these alternative award criteria and concessioning conditions, we show that concessioning without imposing rollout time limits may or may not provide a higher expected social value, depending on the bidding rule used to allocate... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Concessions; Auctions; Award criteria; Service Rollout Time limits; Public Economics; L51; D44; D92. |
| Ano: 2009 |
URL: http://purl.umn.edu/50409 |
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| Dosi, Cesare; Moretto, Michele. |
| We study the competition to operate an infrastructure service by developing a model where firms must report a two-dimensional sealed bid: the price to consumers and the concession fee paid to the government. Two bidding rules are considered in this paper. One rule consists of awarding the concession to the firm that reports the lowest price. The other consists of granting the franchise to the bidder offering the highest fee. We compare the outcome of these rules with reference to two alternative concession arrangements. The former imposes the obligation to immediately undertake the investment required to roll-out the service. The latter allows the concessionaire to optimally decide the investment timing. The focus is on the effect of bidding rules and... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Concessions; Auctions; Bidding Rules; Managerial Flexibility; Research Methods/ Statistical Methods; L51; D44; D92. |
| Ano: 2006 |
URL: http://purl.umn.edu/6630 |
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| Engel, Eduardo M.R.A.; Fischer, Ronald; Galetovic, Alexander. |
| This paper reviews the Latin American experience with highway privatization during the last decade. Based on evidence from Argentina, Colombia and Chile, we find that private financing of new highways freed up fewer public resources than expected because public funds were often diverted to bail out franchise holders. Furthermore, many of the standard benefits of privatization did not materialize because of pervasive contract renegotiations. We argue that the disappointing performance of highway privatization in Latin America was due to two fundamental design flaws. First, countries followed a privatize now, regulate later approach. Second, most concessions were awarded as a fixed-term franchise, thereby creating a demand for guarantees and contract... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Build-operate-and-transfer (BOT); Concessions; Cost-of-funds; Flexibility; Franchising; Government subsidies; Present-value-of-revenue (PVR); Regulation; Renegotiation; Public Economics; H21; L51; L91. |
| Ano: 2003 |
URL: http://purl.umn.edu/28456 |
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