IDEAS home Printed from https://ideas.repec.org/a/eee/transe/v113y2018icp1-21.html
   My bibliography  Save this article

Impacts of pavement deterioration and maintenance cost on Pareto-efficient contracts for highway franchising

Author

Listed:
  • Lu, Zhaoyang
  • Meng, Qiang

Abstract

In a build-operate-transfer (BOT) highway project, pavement roughness progression generally has a direct impact on the highway maintenance cost and user costs. Given two common rehabilitation strategies, this study respectively investigates the optimally designed highway capacity and tolls of multi-type vehicles in Pareto-efficient contracts. Under supplementary conditions, it proves that the optimal toll revenue could fully cover the highway construction and maintenance cost in these contracts, no matter with or without the regulated traffic composition. Further extensions are made to evaluate and identify properties of the highway v/c ratio, rehabilitation period or critical roughness under the two rehabilitation strategies, respectively.

Suggested Citation

  • Lu, Zhaoyang & Meng, Qiang, 2018. "Impacts of pavement deterioration and maintenance cost on Pareto-efficient contracts for highway franchising," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 113(C), pages 1-21.
    • Handle: RePEc:eee:transe:v:113:y:2018:i:c:p:1-21
    DOI: 10.1016/j.tre.2018.02.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1366554517310955
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tre.2018.02.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zhi-Chun Li & Dian Sheng, 2014. "Pavement rehabilitation scheduling and toll pricing under different regulatory regimes," Annals of Operations Research, Springer, vol. 217(1), pages 337-355, June.
    2. Tan, Zhijia & Yang, Hai & Guo, Xiaolei, 2010. "Properties of Pareto-efficient contracts and regulations for road franchising," Transportation Research Part B: Methodological, Elsevier, vol. 44(4), pages 415-433, May.
    3. Li, Yuwei & Madanat, Samer, 2002. "A steady-state solution for the optimal pavement resurfacing problem," Transportation Research Part A: Policy and Practice, Elsevier, vol. 36(6), pages 525-535, July.
    4. Tan, Zhijia & Yang, Hai, 2012. "The impact of user heterogeneity on road franchising," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(5), pages 958-975.
    5. Verhoef, Erik T., 2007. "Second-best road pricing through highway franchising," Journal of Urban Economics, Elsevier, vol. 62(2), pages 337-361, September.
    6. Guo, Xiaolei & Yang, Hai, 2009. "User heterogeneity and bi-criteria system optimum," Transportation Research Part B: Methodological, Elsevier, vol. 43(4), pages 379-390, May.
    7. Lee, Jinwoo & Madanat, Samer, 2014. "Joint optimization of pavement design, resurfacing and maintenance strategies with history-dependent deterioration models," Transportation Research Part B: Methodological, Elsevier, vol. 68(C), pages 141-153.
    8. Moreno-Quintero, Eric & Fowkes, Tony & Watling, David, 2013. "Modelling planner–carrier interactions in road freight transport: Optimisation of road maintenance costs via overloading control," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 50(C), pages 68-83.
    9. Guo, Xiaolei & Xu, Da, 2016. "Profit maximization by a private toll road with cars and trucks," Transportation Research Part B: Methodological, Elsevier, vol. 91(C), pages 113-129.
    10. Ouyang, Yanfeng & Madanat, Samer, 2004. "Optimal scheduling of rehabilitation activities for multiple pavement facilities: exact and approximate solutions," Transportation Research Part A: Policy and Practice, Elsevier, vol. 38(5), pages 347-365, June.
    11. Wu, Di & Yin, Yafeng & Lawphongpanich, Siriphong, 2011. "Optimal selection of build–operate-transfer projects on transportation networks," Transportation Research Part B: Methodological, Elsevier, vol. 45(10), pages 1699-1709.
    12. Niu, Baozhuang & Zhang, Jie, 2013. "Price, capacity and concession period decisions of Pareto-efficient BOT contracts with demand uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 53(C), pages 1-14.
    13. Zhijia Tan & Hai Yang & Xiaolei Guo, 2009. "Build-operate-transfer Schemes for Road Franchising with Road Deterioration and Maintenance Effects," Springer Books, in: William H. K. Lam & S. C. Wong & Hong K. Lo (ed.), Transportation and Traffic Theory 2009: Golden Jubilee, chapter 0, pages 241-261, Springer.
    14. Tsunokawa, Koji & Schofer, Joseph L., 1994. "Trend curve optimal control model for highway pavement maintenance: Case study and evaluation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 28(2), pages 151-166, March.
    15. Gu, Weihua & Ouyang, Yanfeng & Madanat, Samer, 2012. "Joint optimization of pavement maintenance and resurfacing planning," Transportation Research Part B: Methodological, Elsevier, vol. 46(4), pages 511-519.
    16. Meng, Qiang & Lu, Zhaoyang, 2017. "Quantitative analyses of highway franchising under build-operate-transfer scheme: Critical review and future research directions," Transportation Research Part B: Methodological, Elsevier, vol. 102(C), pages 105-123.
    17. Arthur M. Geoffrion, 1967. "Solving Bicriterion Mathematical Programs," Operations Research, INFORMS, vol. 15(1), pages 39-54, February.
    18. Holgun-Veras, Jos & Cetin, Mecit, 2009. "Optimal tolls for multi-class traffic: Analytical formulations and policy implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(4), pages 445-467, May.
    19. Holgui­n-Veras, Jose & Cetin, Mecit & Xia, Shuwen, 2006. "A comparative analysis of US toll policy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(10), pages 852-871, December.
    20. Xiao, Feng & Yang, Hai & Han, Deren, 2007. "Competition and efficiency of private toll roads," Transportation Research Part B: Methodological, Elsevier, vol. 41(3), pages 292-308, March.
    21. Keeler, Theodore E & Small, Kenneth A, 1977. "Optimal Peak-Load Pricing, Investment, and Service Levels on Urban Expressways," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 1-25, February.
    22. Lu, Zhaoyang & Meng, Qiang, 2017. "Analysis of optimal BOT highway capacity and economic toll adjustment provisions under traffic demand uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 100(C), pages 17-37.
    23. de Palma, André & Kilani, Moez & Lindsey, Robin, 2007. "Maintenance, service quality and congestion pricing with competing roads," Transportation Research Part B: Methodological, Elsevier, vol. 41(5), pages 573-591, June.
    24. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn.
    25. Friesz, Terry L. & Enrique Fernandez, J., 1979. "A model of optimal transport maintenance with demand responsiveness," Transportation Research Part B: Methodological, Elsevier, vol. 13(4), pages 317-339, December.
    26. Yang, Hai & Meng, Qiang, 2002. "A note on "highway pricing and capacity choice in a road network under a build-operate-transfer scheme"," Transportation Research Part A: Policy and Practice, Elsevier, vol. 36(7), pages 659-663, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Baños-Pino, José F. & Boto-García, David & Zapico, Emma, 2021. "Persistence and dynamics in the efficiency of toll motorways: The Spanish case," Efficiency Series Papers 2021/03, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    2. Baños-Pino, José F. & Boto-García, David & Zapico, Emma, 2022. "Persistence and dynamics in the efficiency of toll motorways: The Spanish case," Economics of Transportation, Elsevier, vol. 31(C).
    3. Lu, Zhaoyang & Li, Yanfeng & Zuo, Dajie, 2024. "Period-dependent pricing methods of multi-type vehicles for BOT highway projects with pavement rehabilitation effects," Transport Policy, Elsevier, vol. 150(C), pages 84-94.
    4. Shi, Shasha & Yin, Yafeng & An, Qingxian & Chen, Ke, 2021. "Optimal build-operate-transfer road contracts under information asymmetry and uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 152(C), pages 65-86.
    5. Lu, Zhaoyang & Meng, Qiang, 2023. "Effects of asymmetric investment cost information on revenue-compensated build-operate-transfer highway contracts," Transportation Research Part B: Methodological, Elsevier, vol. 172(C), pages 71-92.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meng, Qiang & Lu, Zhaoyang, 2017. "Quantitative analyses of highway franchising under build-operate-transfer scheme: Critical review and future research directions," Transportation Research Part B: Methodological, Elsevier, vol. 102(C), pages 105-123.
    2. Lu, Zhaoyang & Li, Yanfeng & Zuo, Dajie, 2024. "Period-dependent pricing methods of multi-type vehicles for BOT highway projects with pavement rehabilitation effects," Transport Policy, Elsevier, vol. 150(C), pages 84-94.
    3. Lu, Zhaoyang & Meng, Qiang, 2023. "Effects of asymmetric investment cost information on revenue-compensated build-operate-transfer highway contracts," Transportation Research Part B: Methodological, Elsevier, vol. 172(C), pages 71-92.
    4. Lu, Zhaoyang & Meng, Qiang, 2017. "Analysis of optimal BOT highway capacity and economic toll adjustment provisions under traffic demand uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 100(C), pages 17-37.
    5. Wang, Wei (Walker) & Jin, Xi & Tan, Zhijia & Sun, Huijun & Wu, Jianjun, 2022. "Modeling the effects of government subsidy and regulation on BOT transport project contract design within contractible service quality," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    6. Tan, Zhijia & Yang, Hai & Guo, Xiaolei, 2010. "Properties of Pareto-efficient contracts and regulations for road franchising," Transportation Research Part B: Methodological, Elsevier, vol. 44(4), pages 415-433, May.
    7. Tan, Zhijia & Yang, Hai, 2012. "Flexible build-operate-transfer contracts for road franchising under demand uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 46(10), pages 1419-1439.
    8. Hoang-Tung, Nguyen & Viet Hung, Do & Kato, Hironori & Binh, Phan Le, 2021. "Modeling ceiling price for build-operate-transfer road projects in developing countries," Economics of Transportation, Elsevier, vol. 28(C).
    9. Zhi-Chun Li & Dian Sheng, 2014. "Pavement rehabilitation scheduling and toll pricing under different regulatory regimes," Annals of Operations Research, Springer, vol. 217(1), pages 337-355, June.
    10. Zhang, Yiwen & Feng, Zhuo & Zhang, Shuibo & Song, Jinbo, 2018. "The effects of service level on BOT transport project contract," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 184-206.
    11. Lee, Jinwoo & Madanat, Samer, 2015. "A joint bottom-up solution methodology for system-level pavement rehabilitation and reconstruction," Transportation Research Part B: Methodological, Elsevier, vol. 78(C), pages 106-122.
    12. Chen, Zhiyuan & Sun, Shaobo & Li, Jianbin & Zhang, Langlang & Fan, Hao, 2022. "Optimal BOT contracts in a two-road transportation network," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    13. Wang, Fan & Xiong, Minghua & Niu, Baozhuang & Zhuo, Xiaopo, 2018. "Impact of government subsidy on BOT contract design: Price, demand, and concession period," Transportation Research Part B: Methodological, Elsevier, vol. 110(C), pages 137-159.
    14. Yin, Yafeng & Guo, Xiaolei, 2016. "Optimal choice of capacity, toll and government guarantee for build-operate-transfer roads under asymmetric cost informationAuthor-Name: Shi, Shasha," Transportation Research Part B: Methodological, Elsevier, vol. 85(C), pages 56-69.
    15. van den Berg, Vincent A.C., 2013. "Serial private infrastructures," Transportation Research Part B: Methodological, Elsevier, vol. 56(C), pages 186-202.
    16. Zhang, Le & Fu, Liangliang & Gu, Weihua & Ouyang, Yanfeng & Hu, Yaohua, 2017. "A general iterative approach for the system-level joint optimization of pavement maintenance, rehabilitation, and reconstruction planning," Transportation Research Part B: Methodological, Elsevier, vol. 105(C), pages 378-400.
    17. Chen, Zhiyuan & Ye, Hanrui & Liu, Bingxi & Xue, Weili, 2021. "Analysis of road capacity and franchise price decision delegation in toll road BOT project," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 146(C).
    18. Niu, Baozhuang & Zhang, Jie, 2013. "Price, capacity and concession period decisions of Pareto-efficient BOT contracts with demand uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 53(C), pages 1-14.
    19. Zhao, Yunpeng & Song, Jinbo & Feng, Zhuo & Jin, Lulu, 2023. "Incentive contracts with demand guarantee in BOT toll road projects," Research in Transportation Economics, Elsevier, vol. 98(C).
    20. Tan, Zhijia, 2012. "Capacity and toll choice of an add-on toll road under various ownership regimes," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(6), pages 1080-1092.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transe:v:113:y:2018:i:c:p:1-21. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.