Revising certain of these assumptions to be more aggressive will significantly increase the potential concession sale value. By making three key changes to the Base Case valuations, the value of the concession sale can increase substantially.
1) Lengthen the concession period from 75 to 99 years.
2) Assume higher initial traffic and traffic growth than estimated in traffic volume than in "New Mississippi River Bridge Funding Analysis." This is the most significant value driver in the analysis.
3) Assume a higher operating margin of 75% through greater operating efficiency.
The reasonableness of these revised assumptions (with the exception of the lengthening of the concession term, which is a policy decision) will depend upon the results of a more thorough traffic demand study and an analysis of operating costs of similar tolled facilities. The magnitude of the impact of each of these factors depends upon the combination of valuation assumptions used. For example, a more aggressive traffic volume growth assumption has a greater impact on the value of a 99-year concession that of a 75-year concession.