Authors: Germà Bel and John Foote
| Affiliation: | Germà Bel - Universitat de Barcelona |
Acknowledgments : Germà Bel thanks financial support from the Spanish Commission of Science and Technology (SEJ2006-04985). This paper has been presented at the 75th Annual Meeting of the International Bridge, Tunnel and Turnpike Association (Vienna, 20007). We have received useful comments and suggestions from Toni Brunet, Rick Geddes, Tony Gómez-Ibáñez and Jordi Graells.
Abstract:
Recent concessions in France and in the US have resulted in a dramatic difference in the valuation placed on the toll roads; the price paid by the investors in France was twelve times current cash flow whereas investors paid sixty times current cash flow for the U.S. toll roads. In this paper we explore two questions: What accounts for the difference in these multiples, and what are the implications with respect to the public interest. Our analysis illustrates how structural and procedural decisions made by the public owner affect the concession price. Further, the terms of the concession have direct consequences that are enjoyed or borne by the various stakeholders of the toll road.
Date of final version: September 2007
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