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Renegotiation Of Infrastructure Concessions: An Overview

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  • J. Luis Guasch
  • Stéphane Straub

Abstract

ABSTRACT**: Numerous renegotiations have plagued Latin American infrastructure concession contracts in the 1990s, to the point that private sector involvement is being questioned in some countries. This issue has been analyzed in a series of papers by Guasch et al. (2003, 2006a, 2006b). After putting these contributions in the context of the theoretical and empirical literature on contract renegotiation, this note surveys the existing evidence on the determinants of these renegotiations and discusses the main policy implications regarding the necessity of efficient regulatory institutions and the adequate type of price regulation.

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  • J. Luis Guasch & Stéphane Straub, 2006. "Renegotiation Of Infrastructure Concessions: An Overview," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 77(4), pages 479-493, December.
    • Handle: RePEc:bla:annpce:v:77:y:2006:i:4:p:479-493
    DOI: 10.1111/j.1467-8292.2006.00316.x
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    References listed on IDEAS

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    1. Eduardo Engel & Ronald Fischer & Alexander Galetovic, 2003. "Privatizing Highways in Latin America: Fixing What Went Wrong," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2003), pages 129-164, August.
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    12. Estache, Antonio & Guasch, Jose-Luis & Trujillo, Lourdes, 2003. "Price caps, efficiency payoffs, and infrastructure contract renegotiation in Latin America," Policy Research Working Paper Series 3129, The World Bank.
    13. J. Guasch & Jean-Jacques Laffont & Stéphane Straub, 2006. "Renegotiation of Concession Contracts: A Theoretical Approach," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 29(1), pages 55-73, September.
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    16. David Martimort & Stephane Straub, 2006. "Privatization and Changes in Corruption Patterns: The Roots of Public Discontent," Edinburgh School of Economics Discussion Paper Series 147, Edinburgh School of Economics, University of Edinburgh.
    17. J. Luis Guasch, 2004. "Granting and Renegotiating Infrastructure Concessions : Doing it Right," World Bank Publications - Books, The World Bank Group, number 15024.
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    Citations

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    Cited by:

    1. Elisabetta Iossa, 2015. "Contract and procurement design for PPPs in highways: the road ahead," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(3), pages 245-276, September.
    2. Miranda Sarmento, J. & Renneboog, L.D.R., 2014. "Anatomy of Public-Private Partnerships : Their Creation, Financing, and Renegotiations," Discussion Paper 2014-017, Tilburg University, Center for Economic Research.
    3. Hulya Dagdeviren & Simon A. Robertson, 2009. "Access to Water in the Slums of the Developing World," Working Papers 57, International Policy Centre for Inclusive Growth.
    4. Eduardo Engel & Ronald Fischer & Alexander Galetovic, 2009. "Soft budgets and Renegotiations in Public-Private Partnerships," Documentos de Trabajo 265, Centro de Economía Aplicada, Universidad de Chile.
    5. Fonseca-Mairena, María Haydée & Triossi, Matteo, 2019. "Incentives and implementation in marriage markets with externalities," Economics Letters, Elsevier, vol. 185(C).
    6. Gunnar ALEXANDERSSON & Staffan HULTÉN, 2007. "High And Low Bids In Tenders: Strategic Pricing And Other Bidding Behaviour In Public Tenders Of Passenger Railway Services," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 78(2), pages 161-194, June.
    7. Xeni Dassiou & Jon Stern, 2009. "Infrastructure Contracts: Trust and Institutional Updating," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 35(1), pages 171-216, September.
    8. Athias, Laure & Saussier, Stéphane, 2018. "Are public private partnerships that rigid? And why? Evidence from price provisions in French toll road concession contracts," Transportation Research Part A: Policy and Practice, Elsevier, vol. 111(C), pages 174-186.
    9. Ricardo Ferreira Reis & Joaquim Miranda Sarmento, 2019. "“Cutting costs to the bone”: the Portuguese experience in renegotiating public private partnerships highways during the financial crisis," Transportation, Springer, vol. 46(1), pages 285-302, February.
    10. Ginés de Rus, 2014. "The economic evaluation of infrastructure investment. Some inescapable tradeoffs," Working Papers 2014-16, FEDEA.
    11. Ronald Fischer & Nicolás Campos & Eduardo Engel & Alexander Galetovic, 2019. "Renegotiations and Corruption in Infrastructure: The Odebrecht Case," Documentos de Trabajo 346, Centro de Economía Aplicada, Universidad de Chile.
    12. Kokkaew, Nakhon & Oliveira Cruz, Carlos & Alexander, Derek, 2015. "The impact of rule of laws on the recovery of distressed PPP infrastructure Projects," MPRA Paper 77494, University Library of Munich, Germany.
    13. Domingues, Sérgio & Sarmento, Joaquim Miranda, 2016. "Critical renegotiation triggers of European transport concessions," Transport Policy, Elsevier, vol. 48(C), pages 82-91.
    14. Sarmento, Joaquim Miranda & Renneboog, Luc, 2021. "Renegotiating public-private partnerships," Journal of Multinational Financial Management, Elsevier, vol. 59(C).
    15. Cruz, Carlos Oliveira & Sarmento, Joaquim Miranda, 2018. "The price of project finance loans for highways," Research in Transportation Economics, Elsevier, vol. 70(C), pages 161-172.
    16. Phill Wheat & Alexander D. Stead & Yue Huang & Andrew Smith, 2019. "Lowering Transport Costs and Prices by Competition: Regulatory and Institutional Reforms in Low Income Countries," Sustainability, MDPI, vol. 11(21), pages 1-19, October.
    17. Jean Beuve & Stéphane Saussier, 2021. "Renegotiations and Renewals of Public Contracts," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(3), pages 461-482, November.
    18. Engel, Eduardo M.R:A. & Fischer, Ronald & Galetovic, Alexander, 2019. "Soft budgets and endogenous renegotiations in transport PPPs: An equilibrium analysis," Economics of Transportation, Elsevier, vol. 17(C), pages 40-50.
    19. Avdasheva, Svetlana & Gimadi, Victoria, 2019. "Investor response to tariff options under regulation by contract: Evidence from Russian heating concessions," Utilities Policy, Elsevier, vol. 57(C), pages 67-74.
    20. Miranda Sarmento, J.J. & Renneboog, Luc, 2016. "Anatomy of public-private partnerships : Creation, financing, and renegotiations," Other publications TiSEM dc944be7-8594-4439-90da-6, Tilburg University, School of Economics and Management.
    21. Werner Kristjanpoller Rodríguez & John Díaz Antillanca, 2011. "Una nueva estructura de garantías para los bonos chilenos de infraestructura," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 13(25), pages 275-295, July-Dece.
    22. Coco, Giuseppe & De Vincenti, Claudio, 2008. "Optimal price-cap reviews," Utilities Policy, Elsevier, vol. 16(4), pages 238-244, December.
    23. Jon Stern, 2012. "The relationship between regulation and contracts in infrastructure industries: Regulation as ordered renegotiation," Regulation & Governance, John Wiley & Sons, vol. 6(4), pages 474-498, December.

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