(Un)bundling Infrastructure Procurement: Evidence from Water Supply and Sewage Projects
Competition in public procurement auctions in the water supply and sanitation sector is largely limited. This is partly because of high technical complexity and partly because of auction design flaws. The division of lot contracts is an important p...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090304111412 http://hdl.handle.net/10986/4050 |
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okr-10986-40502021-04-23T14:02:14Z (Un)bundling Infrastructure Procurement: Evidence from Water Supply and Sewage Projects Estache, Antonio Iimi, Atsushi AFFILIATED ORGANIZATIONS AUCTION AUCTION MECHANISMS AUCTIONS BID BID EVALUATION BIDDER BIDDERS BIDDING BIDS BUNDLING COMPETITIVE BIDDING COMPETITIVE TENDERS CONTRACT VALUE CONTRACTOR CORRUPT PRACTICES COST ESTIMATE COST ESTIMATES CREDITOR DEVELOPING COUNTRIES DISBURSEMENT DISTRIBUTION NETWORK DUMMY VARIABLES ELECTRICITY EQUIPMENT EVALUATION METHODS EVALUATION PROCESS EVALUATION SYSTEM GOVERNMENT EXPENDITURE GOVERNMENT PROCUREMENT HOST COUNTRIES HOST COUNTRY INFRASTRUCTURE DEVELOPMENT INTERNATIONAL BANK MARKET COMPETITION MARKETPLACE POLITICAL ECONOMY POSITIVE COEFFICIENT POTENTIAL BIDDERS PRIVATE PARTNERSHIP PROCUREMENT PROCUREMENT CONTRACTS PROCUREMENT PRACTICES PROCUREMENT PROCESS PROCUREMENT SYSTEMS PROCUREMENTS PUBLIC PUBLIC CONTRACT PUBLIC PROCUREMENT PUBLIC WORKS QUALITY REQUIREMENTS RESERVE RESULTS SALE SALES TECHNICAL SKILLS TECHNICAL SPECIFICATIONS TELECOM TENDERING TENDERS TRANSMISSION TRANSPARENCY TYPES OF CONTRACTS USES WEB Competition in public procurement auctions in the water supply and sanitation sector is largely limited. This is partly because of high technical complexity and partly because of auction design flaws. The division of lot contracts is an important policy choice for auctioneers to achieve efficiency. In general, there is a tradeoff between competition in auctions and size of contracts. Larger works could benefit from economies of scale and scope, but large contracts might undermine competition. Using data on public procurement auctions for water and sewage projects in developing countries, this paper shows that bidder entry is crucially endogenous, especially because it is determined by the auctioneer's bundling and unbundling strategy. If water treatment plant and distribution network works are bundled in a single lot package, competition would be significantly reduced, and this adverse entry effect would in turn raise the public procurement costs of infrastructure. There is no evidence of positive scope economies in the bidder cost structure. It is important to account for the underlying cost structure for designing efficient auction mechanisms. 2012-03-19T19:09:05Z 2012-03-19T19:09:05Z 2009-03-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090304111412 http://hdl.handle.net/10986/4050 English Policy Research working paper ; no. WPS 4854 5563 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
AFFILIATED ORGANIZATIONS AUCTION AUCTION MECHANISMS AUCTIONS BID BID EVALUATION BIDDER BIDDERS BIDDING BIDS BUNDLING COMPETITIVE BIDDING COMPETITIVE TENDERS CONTRACT VALUE CONTRACTOR CORRUPT PRACTICES COST ESTIMATE COST ESTIMATES CREDITOR DEVELOPING COUNTRIES DISBURSEMENT DISTRIBUTION NETWORK DUMMY VARIABLES ELECTRICITY EQUIPMENT EVALUATION METHODS EVALUATION PROCESS EVALUATION SYSTEM GOVERNMENT EXPENDITURE GOVERNMENT PROCUREMENT HOST COUNTRIES HOST COUNTRY INFRASTRUCTURE DEVELOPMENT INTERNATIONAL BANK MARKET COMPETITION MARKETPLACE POLITICAL ECONOMY POSITIVE COEFFICIENT POTENTIAL BIDDERS PRIVATE PARTNERSHIP PROCUREMENT PROCUREMENT CONTRACTS PROCUREMENT PRACTICES PROCUREMENT PROCESS PROCUREMENT SYSTEMS PROCUREMENTS PUBLIC PUBLIC CONTRACT PUBLIC PROCUREMENT PUBLIC WORKS QUALITY REQUIREMENTS RESERVE RESULTS SALE SALES TECHNICAL SKILLS TECHNICAL SPECIFICATIONS TELECOM TENDERING TENDERS TRANSMISSION TRANSPARENCY TYPES OF CONTRACTS USES WEB |
| spellingShingle |
AFFILIATED ORGANIZATIONS AUCTION AUCTION MECHANISMS AUCTIONS BID BID EVALUATION BIDDER BIDDERS BIDDING BIDS BUNDLING COMPETITIVE BIDDING COMPETITIVE TENDERS CONTRACT VALUE CONTRACTOR CORRUPT PRACTICES COST ESTIMATE COST ESTIMATES CREDITOR DEVELOPING COUNTRIES DISBURSEMENT DISTRIBUTION NETWORK DUMMY VARIABLES ELECTRICITY EQUIPMENT EVALUATION METHODS EVALUATION PROCESS EVALUATION SYSTEM GOVERNMENT EXPENDITURE GOVERNMENT PROCUREMENT HOST COUNTRIES HOST COUNTRY INFRASTRUCTURE DEVELOPMENT INTERNATIONAL BANK MARKET COMPETITION MARKETPLACE POLITICAL ECONOMY POSITIVE COEFFICIENT POTENTIAL BIDDERS PRIVATE PARTNERSHIP PROCUREMENT PROCUREMENT CONTRACTS PROCUREMENT PRACTICES PROCUREMENT PROCESS PROCUREMENT SYSTEMS PROCUREMENTS PUBLIC PUBLIC CONTRACT PUBLIC PROCUREMENT PUBLIC WORKS QUALITY REQUIREMENTS RESERVE RESULTS SALE SALES TECHNICAL SKILLS TECHNICAL SPECIFICATIONS TELECOM TENDERING TENDERS TRANSMISSION TRANSPARENCY TYPES OF CONTRACTS USES WEB Estache, Antonio Iimi, Atsushi (Un)bundling Infrastructure Procurement: Evidence from Water Supply and Sewage Projects |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 4854 |
| description |
Competition in public procurement
auctions in the water supply and sanitation sector is
largely limited. This is partly because of high technical
complexity and partly because of auction design flaws. The
division of lot contracts is an important policy choice for
auctioneers to achieve efficiency. In general, there is a
tradeoff between competition in auctions and size of
contracts. Larger works could benefit from economies of
scale and scope, but large contracts might undermine
competition. Using data on public procurement auctions for
water and sewage projects in developing countries, this
paper shows that bidder entry is crucially endogenous,
especially because it is determined by the auctioneer's
bundling and unbundling strategy. If water treatment plant
and distribution network works are bundled in a single lot
package, competition would be significantly reduced, and
this adverse entry effect would in turn raise the public
procurement costs of infrastructure. There is no evidence of
positive scope economies in the bidder cost structure. It is
important to account for the underlying cost structure for
designing efficient auction mechanisms. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Estache, Antonio Iimi, Atsushi |
| author_facet |
Estache, Antonio Iimi, Atsushi |
| author_sort |
Estache, Antonio |
| title |
(Un)bundling Infrastructure Procurement: Evidence from Water Supply and Sewage Projects |
| title_short |
(Un)bundling Infrastructure Procurement: Evidence from Water Supply and Sewage Projects |
| title_full |
(Un)bundling Infrastructure Procurement: Evidence from Water Supply and Sewage Projects |
| title_fullStr |
(Un)bundling Infrastructure Procurement: Evidence from Water Supply and Sewage Projects |
| title_full_unstemmed |
(Un)bundling Infrastructure Procurement: Evidence from Water Supply and Sewage Projects |
| title_sort |
(un)bundling infrastructure procurement: evidence from water supply and sewage projects |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090304111412 http://hdl.handle.net/10986/4050 |
| _version_ |
1764389685280374784 |