Valuation of the option of early reversion in road concessions

Sánchez Soliño, Antonio and Lara Galera, Antonio Lorenzo and Cabero Colín, Fernando (2018). Valuation of the option of early reversion in road concessions. "European Journal of Transport and Infrastructure Research", v. 18 (n. 2); pp. 239-249. ISSN 1567-7141. https://doi.org/10.18757/ejtir.2018.18.2.3232.

Description

Title: Valuation of the option of early reversion in road concessions
Author/s:
  • Sánchez Soliño, Antonio
  • Lara Galera, Antonio Lorenzo
  • Cabero Colín, Fernando
Item Type: Article
Título de Revista/Publicación: European Journal of Transport and Infrastructure Research
Date: 2018
ISSN: 1567-7141
Volume: 18
Subjects:
Faculty: E.T.S.I. Caminos, Canales y Puertos (UPM)
Department: Ingeniería Civil: Construcción
Creative Commons Licenses: None

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Abstract

In recent years there has been an increase in the interest in contractual flexibility in infrastructure investments, especially in Public-Private Partnership agreements, characterized by the uncertainty derived from the long duration of contracts. This has led to the extension of the theory of real options to the field of infrastructures, as an appropriate methodology for analyzing flexibility in contracts. Within this line of research, this paper focuses on the analysis of the option of early reversion of road concessions, as a right held by the Public Administration and whose value depends on the evolution of a random variable, the volume of traffic. The real option approach is applied to the case study of a road concession in Spain, consequently obtaining significant values for the probability of exercising the option. More generally, this paper contributes to characterizing the early reversion option as a practical tool that can be used by the Administration for the implementation of the infrastructure policy.

Funding Projects

TypeCodeAcronymLeaderTitle
Government of SpainTRA2015-64723-R (MINECO/FEDER)GEDEONJosé Manuel Vassallo y Antonio Sánchez SoliñoGestión eficiente y sostenible de la demanda de transporte en corredores con problemas de congestión mediante el uso de las TIC y la tarificación dinámica

More information

Item ID: 68953
DC Identifier: https://oa.upm.es/68953/
OAI Identifier: oai:oa.upm.es:68953
DOI: 10.18757/ejtir.2018.18.2.3232
Official URL: https://journals.open.tudelft.nl/ejtir/article/view/3232
Deposited by: Antonio Sánchez Soliño
Deposited on: 29 Oct 2021 05:37
Last Modified: 29 Oct 2021 05:38
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