Risk Allocation in Toll Highway Concessions in Spain: Lessons from Economic Recession

Spain has a long tradition of encouraging toll highways by granting concessions to private companies. Concessions in Spain have been characterized by a willingness to transfer considerable risk to the private sector. Traffic demand, acquisition of the right-of-way, and financial risk have often been allocated to the private sector. From 1996 to 2011, 16 toll highway concessions, covering a total distance of 835 km, were awarded by the central government of Spain with this approach. Some of those highways started their operations just before the economic recession began. The recession had negative consequences for Spain’s economy. The gross domestic product per capita plummeted, and the unemployment rate increased from 9% to 20% of the working population in just 2 years. The recession also had severe consequences for the economic performance of toll highway concessions. Traffic levels declined at a much greater rate than did the gross domestic product. In addition, the conditions imposed by the financial markets on borrowers became much stricter because of the liquidity crisis. This study analyzes the impact that the economic recession ultimately had on the performance of toll highway concessions in Spain and the actions that the government adopted to avoid the bankruptcy of the concessionaires. It was found that the economic recession helped identify some deficiencies in how risk had been allocated in Spain. The measures that both Spain and the European Union are adopting so as to improve risk allocation are discussed.

• Record URL:
  https://doi.org/10.3141/2297-10
• Summary URL:
  http://scholar.google.com/scholar_lookup?title=Risk+Allocation+in+Toll+Highway+Concessions+in+Spain%3a+Lessons+from+Economic+Recession&author=J.+Vassallo&author=A.+Ortega&author=M.+de+los+Angeles+Baeza&publication_year=2012
• Availability:
  • Find a library where document is available. Order URL: http://www.trb.org/Main/Blurbs/168502.aspx
• Authors:
  • Vassallo, José Manuel
  • Ortega, Alejandro
  • de los Angeles Baeza, Maria
• Publication Date: 2012

Language

• English

Media Info

• Media Type: Print
• Features: Figures; References; Tables;
• Pagination: pp 80–87
• Monograph Title: Finance, Pricing, Economics, and Equity Issues
• Serial:
  • Transportation Research Record: Journal of the Transportation Research Board
  • Issue Number: 2297
  • Publisher: Transportation Research Board
  • ISSN: 0361-1981

Subject/Index Terms

• TRT Terms: Case studies; Concessions; Economic impacts; Public private partnerships; Recession; Risk management; Toll roads
• Uncontrolled Terms: Risk allocation
• Geographic Terms: Spain
• Subject Areas: Administration and Management; Economics; Finance; Highways; Policy; I10: Economics and Administration;

Filing Info

• Accession Number: 01367749
• Record Type: Publication
• ISBN: 9780309262989
• Report/Paper Numbers: 12-2347
• Files: TRIS, TRB, ATRI
• Created Date: Apr 12 2012 1:43PM