Observatorio de I+D+i UPM

Memorias de investigación
Research Publications in journals:
The role of the discount rate in tendering highway concessions under the LPVR approach.
Year:2010
Research Areas
  • Land transport
Information
Abstract
Flexible-term highway concessions are becoming quite popular around the world as a means of mitigating the traffic risk ultimately allocated to the concessionaire. The most sophisticated mechanism within flexible-term concession approaches is the least present value of the revenues (LPVR). This mechanism consists of awarding the concession to the bidder who offers the least present value of the revenues discounted at a discount rate fixed by the government in the contract. Consequently, the concession will come to an end when the present value of the revenues initially requested has been eventually reached. The aim of this paper is to evaluate the effect that the discount rate established by the government in the bidding terms has on the traffic-risk profile ultimately allocated to the concessionaire. To analyze this effect, a mathematical model is developed in order to obtain the results. I found that the lower the discount rate the larger will be the traffic risk allocated to the concessionaire. Moreover, I found that, if a maximum term is established in the contract, the lower the discount rate, the less skewed towards the downside will be the traffic-risk profile allocated to the concessionaire.
International
Si
JCR
Si
Title
TRANSPORTATION RESEARCH PART A-POLICY AND PRACTICE
ISBN
0965-8564
Impact factor JCR
1,715
Impact info
Volume
44A
Journal number
10
From page
806
To page
814
Month
DICIEMBRE
Ranking
Participants
  • Autor: Jose Manuel Vassallo Magro (UPM)
Research Group, Departaments and Institutes related
  • Creador: Grupo de Investigación: Planificación del Transporte
  • Departamento: Ingeniería Civil: Transportes
  • Centro o Instituto I+D+i: Centro de Investigación del Transporte
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