Broad Roads in a Thin Country : Infrastructure Concessions in Chile
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 sche...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2000/01/438412/broad-roads-thin-country-infrastructure-concessions-chile http://hdl.handle.net/10986/22265 |
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okr-10986-22265 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCIDENT ACCIDENT RATES ACCIDENTS AIR TRANSPORT AIRPORT FACILITIES AIRPORT INFRASTRUCTURE AIRPORTS ASPHALT AXLES BONDS BOTTLENECKS BRIDGES BUSES CARS CITY ROADS CONCESSION COMPANY CONCESSION CONTRACT CONCESSION PERIOD CONCESSION SCHEME CONCESSIONAIRE CONCESSIONAIRES CONCESSIONS CONCRETE CONGESTION CONSTRUCTION CONSTRUCTION AND OPERATION DEBT DEBT SERVICE DEFICITS DOMESTIC PASSENGERS ECONOMIC CONDITIONS ECONOMIC GROWTH EQUITY CAPITAL FINANCIAL INSTITUTIONS FINANCIAL STABILITY FIXED COSTS FRAMEWORK FREEWAYS FREIGHT GOVERNMENT GUARANTEES GOVERNMENT INTERVENTION GRAVEL HIGH RISK HIGH TRAFFIC HIGHWAY HIGHWAY CONCESSIONS HIGHWAYS INCOME INFLATION INJURIES INTERNATIONAL AIRPORT LAWS LEGAL FRAMEWORK LOWER TOLLS MOTORCYCLES NUMBER OF VEHICLES OPERATING COSTS PASSENGER PASSENGER TRAFFIC PASSENGERS PENALTIES PENSIONS PICK-UP PORTS PRESENT VALUE PRIVATE SECTOR PUBLIC EXPENDITURE PUBLIC FUNDS PUBLIC RESOURCES PUBLIC WORKS RANGE REFERENCE REVENUE SHARING REVENUE STREAM ROAD CONCESSIONS ROAD NETWORK ROAD SAFETY ROADS ROUTE SAFETY SATURATION SHADOW TOLLS SOCIAL WELFARE TERMINALS TOLL LEVEL TOLL ROAD TOLL ROADS TOLLING TOLLS TRAFFIC TRAFFIC ALLOCATION TRAFFIC COUNTING TRAFFIC DIVERSION TRAFFIC FLOW TRAFFIC LEVELS TRAFFIC SPEED TRAFFIC VOLUMES TRANSPORT TRANSPORT INFRASTRUCTURE TRUCKS TUNNEL TUNNELS UPPER URBAN ROADS VANS VEHICLES WASTE WATER WATER SUPPLY |
| spellingShingle |
ACCIDENT ACCIDENT RATES ACCIDENTS AIR TRANSPORT AIRPORT FACILITIES AIRPORT INFRASTRUCTURE AIRPORTS ASPHALT AXLES BONDS BOTTLENECKS BRIDGES BUSES CARS CITY ROADS CONCESSION COMPANY CONCESSION CONTRACT CONCESSION PERIOD CONCESSION SCHEME CONCESSIONAIRE CONCESSIONAIRES CONCESSIONS CONCRETE CONGESTION CONSTRUCTION CONSTRUCTION AND OPERATION DEBT DEBT SERVICE DEFICITS DOMESTIC PASSENGERS ECONOMIC CONDITIONS ECONOMIC GROWTH EQUITY CAPITAL FINANCIAL INSTITUTIONS FINANCIAL STABILITY FIXED COSTS FRAMEWORK FREEWAYS FREIGHT GOVERNMENT GUARANTEES GOVERNMENT INTERVENTION GRAVEL HIGH RISK HIGH TRAFFIC HIGHWAY HIGHWAY CONCESSIONS HIGHWAYS INCOME INFLATION INJURIES INTERNATIONAL AIRPORT LAWS LEGAL FRAMEWORK LOWER TOLLS MOTORCYCLES NUMBER OF VEHICLES OPERATING COSTS PASSENGER PASSENGER TRAFFIC PASSENGERS PENALTIES PENSIONS PICK-UP PORTS PRESENT VALUE PRIVATE SECTOR PUBLIC EXPENDITURE PUBLIC FUNDS PUBLIC RESOURCES PUBLIC WORKS RANGE REFERENCE REVENUE SHARING REVENUE STREAM ROAD CONCESSIONS ROAD NETWORK ROAD SAFETY ROADS ROUTE SAFETY SATURATION SHADOW TOLLS SOCIAL WELFARE TERMINALS TOLL LEVEL TOLL ROAD TOLL ROADS TOLLING TOLLS TRAFFIC TRAFFIC ALLOCATION TRAFFIC COUNTING TRAFFIC DIVERSION TRAFFIC FLOW TRAFFIC LEVELS TRAFFIC SPEED TRAFFIC VOLUMES TRANSPORT TRANSPORT INFRASTRUCTURE TRUCKS TUNNEL TUNNELS UPPER URBAN ROADS VANS VEHICLES WASTE WATER WATER SUPPLY Gómez-Lobo, Andrés Hinojosa, Sergio Broad Roads in a Thin Country : Infrastructure Concessions in Chile |
| geographic_facet |
Latin America & Caribbean Latin America Chile |
| relation |
Policy Research Working Paper;No. 2279 |
| description |
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. |
| format |
Working Paper |
| author |
Gómez-Lobo, Andrés Hinojosa, Sergio |
| author_facet |
Gómez-Lobo, Andrés Hinojosa, Sergio |
| author_sort |
Gómez-Lobo, Andrés |
| title |
Broad Roads in a Thin Country : Infrastructure Concessions in Chile |
| title_short |
Broad Roads in a Thin Country : Infrastructure Concessions in Chile |
| title_full |
Broad Roads in a Thin Country : Infrastructure Concessions in Chile |
| title_fullStr |
Broad Roads in a Thin Country : Infrastructure Concessions in Chile |
| title_full_unstemmed |
Broad Roads in a Thin Country : Infrastructure Concessions in Chile |
| title_sort |
broad roads in a thin country : infrastructure concessions in chile |
| publisher |
World Bank, Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2000/01/438412/broad-roads-thin-country-infrastructure-concessions-chile http://hdl.handle.net/10986/22265 |
| _version_ |
1764450576769220608 |
| spelling |
okr-10986-222652021-04-23T14:04:07Z Broad Roads in a Thin Country : Infrastructure Concessions in Chile Gómez-Lobo, Andrés Hinojosa, Sergio ACCIDENT ACCIDENT RATES ACCIDENTS AIR TRANSPORT AIRPORT FACILITIES AIRPORT INFRASTRUCTURE AIRPORTS ASPHALT AXLES BONDS BOTTLENECKS BRIDGES BUSES CARS CITY ROADS CONCESSION COMPANY CONCESSION CONTRACT CONCESSION PERIOD CONCESSION SCHEME CONCESSIONAIRE CONCESSIONAIRES CONCESSIONS CONCRETE CONGESTION CONSTRUCTION CONSTRUCTION AND OPERATION DEBT DEBT SERVICE DEFICITS DOMESTIC PASSENGERS ECONOMIC CONDITIONS ECONOMIC GROWTH EQUITY CAPITAL FINANCIAL INSTITUTIONS FINANCIAL STABILITY FIXED COSTS FRAMEWORK FREEWAYS FREIGHT GOVERNMENT GUARANTEES GOVERNMENT INTERVENTION GRAVEL HIGH RISK HIGH TRAFFIC HIGHWAY HIGHWAY CONCESSIONS HIGHWAYS INCOME INFLATION INJURIES INTERNATIONAL AIRPORT LAWS LEGAL FRAMEWORK LOWER TOLLS MOTORCYCLES NUMBER OF VEHICLES OPERATING COSTS PASSENGER PASSENGER TRAFFIC PASSENGERS PENALTIES PENSIONS PICK-UP PORTS PRESENT VALUE PRIVATE SECTOR PUBLIC EXPENDITURE PUBLIC FUNDS PUBLIC RESOURCES PUBLIC WORKS RANGE REFERENCE REVENUE SHARING REVENUE STREAM ROAD CONCESSIONS ROAD NETWORK ROAD SAFETY ROADS ROUTE SAFETY SATURATION SHADOW TOLLS SOCIAL WELFARE TERMINALS TOLL LEVEL TOLL ROAD TOLL ROADS TOLLING TOLLS TRAFFIC TRAFFIC ALLOCATION TRAFFIC COUNTING TRAFFIC DIVERSION TRAFFIC FLOW TRAFFIC LEVELS TRAFFIC SPEED TRAFFIC VOLUMES TRANSPORT TRANSPORT INFRASTRUCTURE TRUCKS TUNNEL TUNNELS UPPER URBAN ROADS VANS VEHICLES WASTE WATER WATER SUPPLY 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. 2015-07-21T14:48:15Z 2015-07-21T14:48:15Z 2000-01 Working Paper http://documents.worldbank.org/curated/en/2000/01/438412/broad-roads-thin-country-infrastructure-concessions-chile http://hdl.handle.net/10986/22265 English en_US Policy Research Working Paper;No. 2279 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean Latin America Chile |