BIDDING FOR ROADS: THE PORTUGUESE EXPERIENCE

Three years ago, the Portuguese Government decided to circumvent the lack of public funding by involvement of private capital in motorway construction. The National Road Agency put out to tender eight contracts, totalling 1200km. Under each of the contracts, the private sector will build or upgrade a road and maintain it for a period of 30 years. Two of these contracts are based in a Real Toll Collection Regime and the others on the Shadow Toll scheme. The financial closing was already achieved on the first three contracts, and all the others are in the negotiation stage or on the bids appraisal stage. This paper presents details on the legal framework created for this Private Finance Initiative as well as the type of tender and appraisal methodology for awarding concession. The difficulties experienced during the evaluation of bids and negotiation are discussed as well as the period needed to award the concessions. Finally, the view points about the project risk of the private sector, and particularly of the financial institutions, are analysed. The first impressions are that the procurement process is time consuming compared to traditional procurement and also the cost of bidding and appraisal are much higher but the construction time is much faster. Another conclusion is that cutting on discretionary might ease the evaluation process but can pose serious problems to the State. The type of tender (sealed-bids-two-stage with parallel negotiation) presents advantages and disadvantages which have to be carefully weighted. For the covering abstract see IRRD E104621.

Language

  • English

Media Info

  • Features: References;
  • Pagination: p. 13-25

Subject/Index Terms

Filing Info

  • Accession Number: 00790441
  • Record Type: Publication
  • Source Agency: Transport Research Laboratory
  • ISBN: 0-86050-322-4
  • Files: ITRD
  • Created Date: Apr 11 2000 12:00AM