Valuation of the option of early reversion in road concessions
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...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
TU Delft OPEN Publishing
2018-04-01
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| Series: | European Journal of Transport and Infrastructure Research |
| Online Access: | https://journals.open.tudelft.nl/ejtir/article/view/3232 |
| _version_ | 1797429366169272320 |
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| author | Antonio Sánchez Soliño Antonio L. Lara Galera Fernando Cabero Colín |
| author_facet | Antonio Sánchez Soliño Antonio L. Lara Galera Fernando Cabero Colín |
| author_sort | Antonio Sánchez Soliño |
| collection | DOAJ |
| description | 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. |
| first_indexed | 2024-03-09T09:12:07Z |
| format | Article |
| id | doaj.art-9ed380bfa32c4e329898d9e846e0320e |
| institution | Directory Open Access Journal |
| issn | 1567-7141 |
| language | English |
| last_indexed | 2024-03-09T09:12:07Z |
| publishDate | 2018-04-01 |
| publisher | TU Delft OPEN Publishing |
| record_format | Article |
| series | European Journal of Transport and Infrastructure Research |
| spelling | doaj.art-9ed380bfa32c4e329898d9e846e0320e2023-12-02T08:24:36ZengTU Delft OPEN PublishingEuropean Journal of Transport and Infrastructure Research1567-71412018-04-0118210.18757/ejtir.2018.18.2.32322844Valuation of the option of early reversion in road concessionsAntonio Sánchez Soliño0Antonio L. Lara Galera1Fernando Cabero Colín2Universidad Politécnica de MadridUniversidad Politécnica de MadridUniversidad Politécnica de MadridIn 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.https://journals.open.tudelft.nl/ejtir/article/view/3232 |
| spellingShingle | Antonio Sánchez Soliño Antonio L. Lara Galera Fernando Cabero Colín Valuation of the option of early reversion in road concessions European Journal of Transport and Infrastructure Research |
| title | Valuation of the option of early reversion in road concessions |
| title_full | Valuation of the option of early reversion in road concessions |
| title_fullStr | Valuation of the option of early reversion in road concessions |
| title_full_unstemmed | Valuation of the option of early reversion in road concessions |
| title_short | Valuation of the option of early reversion in road concessions |
| title_sort | valuation of the option of early reversion in road concessions |
| url | https://journals.open.tudelft.nl/ejtir/article/view/3232 |
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