Analysis of alternative tendering mechanisms for transportation Public-Private Partnerships

Sánchez Soliño, Antonio and Gago de Santos, Pilar (2013). Analysis of alternative tendering mechanisms for transportation Public-Private Partnerships. In: "13th World Conference on Transportation Research (WCTR)", 15/07/2013 - 18/07/2013, Río de Janeiro (Brasil). pp. 1-17.

Description

Title: Analysis of alternative tendering mechanisms for transportation Public-Private Partnerships
Author/s:
  • Sánchez Soliño, Antonio
  • Gago de Santos, Pilar
Item Type: Presentation at Congress or Conference (Article)
Event Title: 13th World Conference on Transportation Research (WCTR)
Event Dates: 15/07/2013 - 18/07/2013
Event Location: Río de Janeiro (Brasil)
Title of Book: Proceedings of the 13th World Conference on Transport Research (WCTR), July 15-18, 2013 Rio de Janeiro, Brazil
Date: July 2013
Subjects:
Faculty: E.T.S.I. Caminos, Canales y Puertos (UPM)
Department: Ingeniería Civil: Construcción
Creative Commons Licenses: Recognition - No derivative works - Non commercial

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Abstract

This paper describes a theoretical model based primarily on transaction costs, for comparing the various tendering mechanisms used for transportation Public-Private Partnership (PPP) projects. In particular, the model contrasts negotiated procedures with the open procedure, as defined by the current European Union legislation on public tendering. The model includes both ex ante transaction costs (borne during the tendering stage) and ex post transaction costs (such as enforcement costs, re-negotiation costs, and costs arising from litigation between partners), explaining the trade-off between them. Generally speaking, it is assumed that the open procedure implies lower transaction costs ex ante, while the negotiated procedure reduces the probability of the appearance of new contingencies not foreseen in the contract, hence diminishing the expected value of transaction costs ex post. Therefore, the balance between ex ante and ex post transaction costs is the main criterion for deciding whether the open or negotiated procedure would be optimal. Notwithstanding, empirical evidence currently exists only on ex ante transaction costs in transportation infrastructure projects. This evidence has shown a relevant difference between the two procedures as far as ex ante costs are concerned, favouring the open procedure. The model developed in this paper also demonstrates that a larger degree of complexity in a contract does not unequivocally favour the use of a negotiated procedure. Only in those cases dealing with very innovative projects, where important dimensions of the quality of the asset or service are not verifiable, may we observe an advantage in favour of the negotiated procedure. The bottom line is that we find it difficult to justify the employment of negotiated procedures in most transportation PPP contracts, especially in the field of roads. Nevertheless, the field remains open for future empirical work and research on the levels of transaction costs borne ex post in PPP contracts, as well as on the probabilities of such costs appearing under any of the procurement procedures.

More information

Item ID: 29741
DC Identifier: http://oa.upm.es/29741/
OAI Identifier: oai:oa.upm.es:29741
Official URL: http://www2.wctr2013rio.com/
Deposited by: Memoria Investigacion
Deposited on: 16 Jun 2014 08:35
Last Modified: 17 Apr 2018 15:31
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