Privatizing Roads : A New Method for Auctioning Highways
The authors attribute many of the problems in highway privatization to the combined effect of features of the highway business and the fixed term contracts used. First, traffic forecasts are notoriously imprecise, and the franchise holder has almos...
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| Format: | Viewpoint |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/1997/05/693105/privatizing-roads-new-method-auctioning-highways http://hdl.handle.net/10986/11586 |
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okr-10986-115862021-06-14T11:04:08Z Privatizing Roads : A New Method for Auctioning Highways Engel, Eduardo Fischer, Ronald Galetovic, Alexander ACCURATE TRAFFIC PREDICTIONS ARTIFICIALLY LOW TOLLS BANKRUPTCY COMPENSATION DEBT FRANCHISE FRANCHISES HIGH RISK HIGHWAY FRANCHISES HIGHWAY PRIVATIZATION INCOME MAXIMUM TOLL NEW HIGHWAYS OIL PRESENT VALUE PRESENT VALUE OF TOLL REVENUE PRIVATIZATION PUBLIC GOODS QUALITY STANDARDS REGULATOR REGULATORS REGULATORY INSTITUTIONS ROADS TOLL BOOTHS TOLL INCREASE TOLL REVENUE TOLL REVENUES TOLL ROAD TOLLS TRAFFIC TRAFFIC TURNS TYPE OF CONTRACTS ROADS & HIGHWAYS DENATIONALIZATION TRAFFIC SURVEYS AUCTIONS PROCUREMENT The authors attribute many of the problems in highway privatization to the combined effect of features of the highway business and the fixed term contracts used. First, traffic forecasts are notoriously imprecise, and the franchise holder has almost no control over demand. Second, most franchises have been awarded for a fixed term that is independent of demand realization. They propose a new mechanism the --least-present-value-of-revenue auction-- that overcomes flaws in the fixed term franchise because the contract term automatically adjusts to traffic growth. If traffic grows more slowly than expected, the term lengthens and if more rapidly, it shortens. The basic principle underlying the auction is that the franchise holder should not make losses when the long-run demand for the highway is sufficient to pay all costs. 2012-08-13T15:28:01Z 2012-08-13T15:28:01Z 1997-05 http://documents.worldbank.org/curated/en/1997/05/693105/privatizing-roads-new-method-auctioning-highways http://hdl.handle.net/10986/11586 English Viewpoint: Public Policy for the Private Sector; Note No. 112 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Viewpoint Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCURATE TRAFFIC PREDICTIONS ARTIFICIALLY LOW TOLLS BANKRUPTCY COMPENSATION DEBT FRANCHISE FRANCHISES HIGH RISK HIGHWAY FRANCHISES HIGHWAY PRIVATIZATION INCOME MAXIMUM TOLL NEW HIGHWAYS OIL PRESENT VALUE PRESENT VALUE OF TOLL REVENUE PRIVATIZATION PUBLIC GOODS QUALITY STANDARDS REGULATOR REGULATORS REGULATORY INSTITUTIONS ROADS TOLL BOOTHS TOLL INCREASE TOLL REVENUE TOLL REVENUES TOLL ROAD TOLLS TRAFFIC TRAFFIC TURNS TYPE OF CONTRACTS ROADS & HIGHWAYS DENATIONALIZATION TRAFFIC SURVEYS AUCTIONS PROCUREMENT |
| spellingShingle |
ACCURATE TRAFFIC PREDICTIONS ARTIFICIALLY LOW TOLLS BANKRUPTCY COMPENSATION DEBT FRANCHISE FRANCHISES HIGH RISK HIGHWAY FRANCHISES HIGHWAY PRIVATIZATION INCOME MAXIMUM TOLL NEW HIGHWAYS OIL PRESENT VALUE PRESENT VALUE OF TOLL REVENUE PRIVATIZATION PUBLIC GOODS QUALITY STANDARDS REGULATOR REGULATORS REGULATORY INSTITUTIONS ROADS TOLL BOOTHS TOLL INCREASE TOLL REVENUE TOLL REVENUES TOLL ROAD TOLLS TRAFFIC TRAFFIC TURNS TYPE OF CONTRACTS ROADS & HIGHWAYS DENATIONALIZATION TRAFFIC SURVEYS AUCTIONS PROCUREMENT Engel, Eduardo Fischer, Ronald Galetovic, Alexander Privatizing Roads : A New Method for Auctioning Highways |
| relation |
Viewpoint: Public Policy for the Private Sector; Note No. 112 |
| description |
The authors attribute many of the
problems in highway privatization to the combined effect of
features of the highway business and the fixed term
contracts used. First, traffic forecasts are notoriously
imprecise, and the franchise holder has almost no control
over demand. Second, most franchises have been awarded for a
fixed term that is independent of demand realization. They
propose a new mechanism the --least-present-value-of-revenue
auction-- that overcomes flaws in the fixed term franchise
because the contract term automatically adjusts to traffic
growth. If traffic grows more slowly than expected, the term
lengthens and if more rapidly, it shortens. The basic
principle underlying the auction is that the franchise
holder should not make losses when the long-run demand for
the highway is sufficient to pay all costs. |
| format |
Publications & Research :: Viewpoint |
| author |
Engel, Eduardo Fischer, Ronald Galetovic, Alexander |
| author_facet |
Engel, Eduardo Fischer, Ronald Galetovic, Alexander |
| author_sort |
Engel, Eduardo |
| title |
Privatizing Roads : A New Method for Auctioning Highways |
| title_short |
Privatizing Roads : A New Method for Auctioning Highways |
| title_full |
Privatizing Roads : A New Method for Auctioning Highways |
| title_fullStr |
Privatizing Roads : A New Method for Auctioning Highways |
| title_full_unstemmed |
Privatizing Roads : A New Method for Auctioning Highways |
| title_sort |
privatizing roads : a new method for auctioning highways |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/1997/05/693105/privatizing-roads-new-method-auctioning-highways http://hdl.handle.net/10986/11586 |
| _version_ |
1764417269348171776 |