Risk-Sharing in Highway Concessions: Contractual Diversity in Portugal

TitleRisk-Sharing in Highway Concessions: Contractual Diversity in Portugal
Publication TypeJournal Article
Year of Publication2013
AuthorsCruz, COliveira, Marques, RCunha
JournalJournal of Professional Issues in Engineering Education & Practice
Date Published2013
Publication Languageeng
ISBN Number10523928
KeywordsArchitects , CONCESSIONS , Contracts , Contractual , Highway , Highways , PORTUGAL , private , regulations , RISK , Risk-sharing , ROAD , Roads
AbstractPrivate sector involvement in road concessions has been one of the main options for governments to engage in large-scale road development plans. Political interference, optimism bias in demand forecasts and the absence of active regulators lead to frequent renegotiations of road contracts and large public remunerations to concessionaires. Because they are unable to deal with the increasing uncertainty in forecasts, governments are using availability payment schemes, which appear to be robust solutions that limit public losses. This paper evaluates the allocations of risk in four Portuguese road concessions under a contractual regulatory regime, discusses the types of incentive mechanisms used in each instance, and draws lessons from these case studies. This investigation reveals evidence indicating that although contracts are becoming increasingly complex over time, the public sector is assuming more production and commercial risks in the highway development process. [ABSTRACT FROM AUTHOR]Copyright of Journal of Professional Issues in Engineering Education & Practice is the property of American Society of Civil Engineers and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
NotesCruz, Carlos Oliveira Marques, Rui Cunha 1; Affiliation: 1: Associate Professor, Center for Management Studies (CEG-IST), Technical Univ. of Lisbon, Avenida Rovisco Pais, 1049-001 Lisbon, Portugal. E-mail:; Source Info: Apr2013, Vol. 139 Issue 2, p99; Subject Term: PRIVATE sector; Subject Term: ARCHITECTS; Subject Term: ROADS -- Maintenance & repair; Subject Term: CONCESSIONS (Administrative law); Subject Term: PORTUGAL; Author-Supplied Keyword: Contracts; Author-Supplied Keyword: Contractual regulation; Author-Supplied Keyword: Highway development; Author-Supplied Keyword: Highways and roads; Author-Supplied Keyword: Portugal; Author-Supplied Keyword: Private sector; Author-Supplied Keyword: Regulations; Author-Supplied Keyword: Risk management; Author-Supplied Keyword: Risk-sharing; Author-Supplied Keyword: Road concessions; NAICS/Industry Codes: 237310 Highway, Street, and Bridge Construction; Number of Pages: 10p; Illustrations: 3 Charts, 1 Graph; Document Type: Article