Reflections on a Necessary Approach to Tender Specifications for a Sufficient Concurrence of Bidders to Ensure the Project's Success

The current world economic situation features two main characteristics that, if analysed together, may each be an appropriate solution to the requirements presented by the other. On the one hand, there is the need of certain governments to obtain financial resources for the construction of roads, so as to generate and maintain economic growth. Nevertheless, most of these governments are unable to dedicate funds from their annual budgets to this purpose, as today’s budgets are mainly directed to social expenditure and debt-servicing payments. On the other hand, the financial situation has forced central banks in major countries to pursue no-interest or even negative-interest policies. Therefore, some investors (investment funds and banks, pension funds) find it more and more difficult to obtain a reasonable return on their capital. In the case of roads, an opportunity arises if the two scenarios are combined. On the one hand, governments need infrastructures they cannot pay for but that can be paid for by their users. On the other hand, investors are looking for “reliable” projects to invest in order to obtain the targeted returns. For this reason, it is important to establish certain rules, based on high quality studies demonstrating the need for infrastructure as well as the potential demand to allow its financing. Therefore, the concession grantor and the concessionaire must not only share the risks efficiently, in such a way that each part assumes the risks that each can better manage, but also try to minimize those of the other part. Besides, both parties must assume a distribution of profits, if higher than projected. Such is the case of the concession contract for the road between San José and Caldera, tendered in 1998, signed in 2001 and started in January, 2008. It can be said that the terms and conditions of this contract anticipated the current situation, given the time when they were outlined, as they combined the two aspects mentioned above. A guaranteed minimum income (GMI), joint participation above a certain amount of income and the use of the present value of income (PVI) are tools that must be applied in order to draft a contract that allows these two main goals to be met.

Language

  • English

Media Info

  • Media Type: Digital/other
  • Features: References;
  • Pagination: 9p
  • Monograph Title: Proceedings of the 25th World Road Congress - Seoul 2015: Roads and Mobility - Creating New Value from Transport

Subject/Index Terms

Filing Info

  • Accession Number: 01667952
  • Record Type: Publication
  • ISBN: 9782840604235
  • Report/Paper Numbers: 0176
  • Files: TRIS
  • Created Date: Apr 30 2018 7:43PM