Privatization and Regulation of Transport Infrastructure in the 1990s : Successes . . . and Bugs to Fix for the Next Mille

Learning to regulate fairly, effectively, and at arm's length may be the main challenge governments face in attracting private investment and financing to the transport sector. - Governments should increasingly be able to rely on the private sector for help supporting (and financing) the transp...

Full description

Main Author: Estache, Antonio
Format: eBook
Language:English
Published: Washington, D.C The World Bank 1999, 1999
Subjects:
Air
Bus
Online Access:
Collection: World Bank E-Library Archive - Collection details see MPG.ReNa
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100 1 |a Estache, Antonio 
245 0 0 |a Privatization and Regulation of Transport Infrastructure in the 1990s  |b Successes . . . and Bugs to Fix for the Next Mille  |c Estache, Antonio 
260 |a Washington, D.C  |b The World Bank  |c 1999, 1999 
300 |a Online-Ressource (1 online resource (42 p.)) 
653 |a Air 
653 |a Airports 
653 |a Bus 
653 |a Costs 
653 |a Driving 
653 |a Infrastructure Projects 
653 |a Private Transport 
653 |a Public Works 
653 |a Rail 
653 |a Railways 
653 |a Roads 
653 |a Safety 
653 |a Toll 
653 |a Transport 
653 |a Transport 
653 |a Transport Activity 
653 |a Transport Economics, Policy and Planning 
653 |a Transport Infrastructure 
653 |a Transport Infrastructures 
653 |a Transport Operators 
653 |a Transport Policies 
653 |a Transport Projects 
700 1 |a Estache, Antonio 
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989 |b WOBA  |a World Bank E-Library Archive 
856 |u http://elibrary.worldbank.org/content/workingpaper/10.1596/1813-9450-2248  |3 Volltext  |x Verlag  |3 Volltext 
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520 |a Learning to regulate fairly, effectively, and at arm's length may be the main challenge governments face in attracting private investment and financing to the transport sector. - Governments should increasingly be able to rely on the private sector for help supporting (and financing) the transport sector - especially infrastructure support services for which there is heavy demand - but first they must improve their regulatory tools and sort out the institutional mess surrounding the regulatory process. Some countries have put together creative restructuring models and financing designs that tap potential in the private sector. Roads will continue to need significant public funding, but there are innovative ways (including shadow tolls) to attract private financing for road maintenance and investment. Partnerships between the public and private sectors have remained largely untapped at ports and airports.  
520 |a To attract more private capital to the sector, regulators must know the cost of capital, know how to be fair to captive shippers, and have a better handle on demand - so they have more credibility when conflicts arise. Governments have overemphasized making deals and have generally underestimated the difficulty of taking on their new job as regulators. They are increasingly switching to contract-based regulation, to firm up the commitments of all parties involved, but are not adequately emphasizing contract design that anticipates problems and addresses unpredictable situations. This increases the risk of arbitrary regulatory rulings, which increases regulatory and political risks, which raises the expected rate of return required by potential investors. And all that makes future projects costlier or more difficult, adding to the effects of the 1998-99 financial crisis.  
520 |a As a result of increased risk, the two groups most interested in the sector are: · Large, strong operators in the sector - typically in tandem with local construction companies - that feel confident they can take on regulators in case of conflict. · Risk-takers carving a niche for themselves. Either way, taxpayers and transport users are exposed to government, regulator, or operator failures that result in contract renegotiations (the norm, rather than the exception, in transport infrastructure projects). Gains from privatization might not reach consumers, simply because governments are ignoring the importance of ensuring fair distribution of long-run gains through the early creation of independent and accountable regulatory institutions that work closely with effective competition agencies. This paper - a product of Governance, Regulation, and Finance, World Bank Institute - is part of a larger effort in the institute to increase understanding of infrastructure regulation.  
520 |a The author may be contacted at aestache@worldbank.org