Impact of the Economic Recession on Toll Highway Concessions in Spain

After joining the European Union in 1986, Spain experienced steady economic growth that enabled the country to grow at a greater pace than other European countries. During this period, the government of Spain opted for major investments in public infrastructure by taking advantage both of the funding provided by the European Union and of several types of public-private-partnership (PPP) approaches. Within this framework, the government of Spain between 1996 and 2004 procured a series of toll highway concessions. These concessions entered into operation a few years before the global economic recession made itself felt in Spain. The concession contracts signed between the government and some private consortia allocated most of the risks (expropriation, construction, and traffic) to the private sector. In this paper the impact that the economic recession has had on the business performance of the concessionaires is assessed, and the effectiveness of the measures adopted by the government to help the concessionaire to avoid bankruptcy is analyzed. It was found that some of the guarantees offered by the legal framework to the concessionaires in case of bankruptcy are prompting an outcome that could negatively affect the users. In addition to that, some suggestions as to how to better allocate risk in toll highway concessions in the future are provided.

Traffic uncertainty in toll motorway concessions in Spain

This study assessed the inaccuracy of the traffic estimates for toll motorway concessions in Spain. It was found that the estimates conducted by both the government and the concessionaire showed a significant bias towards overestimating traffic. The level of overestimation in Spain is even greater than that reported by other studies based on worldwide data. The notorious levels of overestimation entail severe burdens to the economics of the concessionaires that often prompt renegotiations of the contracts, which are often accepted by the government. These renegotiations usually end up with toll changes or extension of the concession terms, which have to be ultimately borne by future motorway users. It is postulated herein that the bias towards overestimating traffic in toll motorways in Spain is mostly caused by strategic issues rather than by modelling errors.

Risk Allocation in Toll Highway Concessions in Spain: Lessons from Economic Recession

Spain has a long tradition of encouraging toll highways by granting concessions to private companies. Concessions in Spain have been characterized by a willingness to transfer considerable risk to the private sector. Traffic demand, acquisition of the right-of-way, and financial risk have often been allocated to the private sector. From 1996 to 2011, 16 toll highway concessions, covering a total distance of 835 km, were awarded by the central government of Spain with this approach. Some of those highways started their operations just before the economic recession began. The recession had negative consequences for Spain's economy. The gross domestic product per capita plummeted, and the unemployment rate increased from 9% to 20% of the working population in just 2 years. The recession also had severe consequences for the economic performance of toll highway concessions. Traffic levels declined at a much greater rate than did the gross domestic product. In addition, the conditions imposed by the financial markets on borrowers became much stricter because of the liquidity crisis. This study analyzes the impact that the economic recession ultimately had on the performance of toll highway concessions in Spain and the actions that the government adopted to avoid the bankruptcy of the concessionaires. It was found that the economic recession helped identify some deficiencies in how risk had been allocated in Spain. The measures that both Spain and the European Union are adopting so as to improve risk allocation are discussed.

Analysis of road safety incentives in highway concessions in Spain

Public Private Partnerships (PPPs) are mostly implemented for three reasons: to circumvent budgetary constraints, encourage efficiency and improvement of quality in the provision of public infrastructure. One of the ways of reaching the latter objective is by the introduction of performance-based standards tied to bonuses and penalties to reward or punish the performance of the contractor. These performance based standards often refer to different aspects such as technical, environmental and safety issues. This paper focuses on the implementation of safety based incentives in PPPs. The main aim of this paper is to analyze whether the incentives to improve road safety in PPPs are effective in improving safety ratios in Spain. To this end, negative binomial regression models have been applied using information from the Spanish high capacity network in 2006. The findings indicate that even though road safety is highly influenced by variables that are not much controllable by the contractor such as the Average Annual Daily Traffic and the percentage of heavy vehicles in the highway, the implementation of safety incentives in PPPs has a positive influence in the reduction of fatalities, injuries and accidents.

The influence of economic incentives linked to road safety indicators on accidents: The case of toll concessions in Spain

The goal of this paper is to evaluate whether the incentives incorporated in toll highway concession contracts in order to encourage private operators to adopt measures to reduce accidents are actually effective at improving safety. To this end, we implemented negative binomial regression models using information about highway characteristics and accident data from toll highway concessions in Spain from 2007 to 2009. Our results show that even though road safety is highly influenced by variables that are not managed by the contractor, such as the annual average daily traffic (AADT), the percentage of heavy vehicles on the highway, number of lanes, number of intersections and average speed; the implementation of these incentives has a positive influence on the reduction of accidents and injuries. Consequently, this measure seems to be an effective way of improving safety performance in road networks.

Analysis of road safety incentives in highway concessions in Spain

Public Private Partnerships (PPPs) are mostly implemented for three reasons: to circumvent budgetary constraints, encourage efficiency and improvement of quality in the provision of public infrastructure. One of the ways of reaching the latter objective is by the introduction of performance-based standards tied to bonuses and penalties to reward or punish the performance of the contractor. These performance based standards often refer to different aspects such as technical, environmental and safety issues. This paper focuses on the implementation of safety based incentives in PPPs. The main aim of this paper is to analyze whether the incentives to improve road safety in PPPs are effective in improving safety ratios in Spain. To this end, negative binomial regression models have been applied using information from the Spanish high capacity network in 2006. The findings indicate that even though road safety is highly influenced by variables that are not much controllable by the contractor such as the Average Annual Daily Traffic and the percentage of heavy vehicles in the highway, the implementation of safety incentives in PPPs has a positive influence in the reduction of fatalities, injuries and accidents.

Do Public Private Partnerships Improve Road Safety? The Case of Toll Concessions in Spain

El Transportation Research Board es un congreso de reconocido prestigio internacional en el ámbito de la investigación del transporte. Aunque las actas publicadas están en formato digital y sin ISSN ni ISBN, lo consideramos lo suficientemente importante como para que se considere en los indicadores. This paper focuses on the implementation of safety based incentives in Public Private Partnerships (PPPs). The aim of this paper is twofold. First, to evaluate whether PPPs lead to an improvement in road safety, when compared with other infrastructure management systems. Second, is to analyze whether the incentives to improve road safety in PPP contracts in Spain have been effective at improving safety performance. To this end, negative binomial regression models have been applied using information from the Spanish high-capacity network covering years 2007-2009. The results showed that even though road safety is highly influenced by variables that are not manageable by the private concessionaire such as the average annual daily traffic, the implementation of safety incentives in PPPs has a positive influence in the reduction of accidents.

Empirical analysis of traffic volume for the application of the options theory to highway concessions

*************************************************************************************** EL WCTR es un Congreso de reconocido prestigio internacional en el ámbito de la investigación del transporte que hasta el 2010 publicaba sus libros de abstracts con ISBN. Por ello consideramos que debería seguir teníendose en cuenta para los indicadores de calidad ******************************************************************************************* Investment projects in the field of transportation infrastructures have a high degree of uncertainty and require an important amount of resources. In highway concessions in particular, the calculation of the Net Present Value (NPV) of the project by means of the discount of cash flows, may lead to erroneous results when the project incorporates certain flexibility. In these cases, the theory of real options is an alternative tool for the valuation of concessions. When the variable that generates uncertainty (in our case, the traffic) follows a random walk (or Geometric Brownian Motion), we can calculate the value of the options embedded in the contract starting directly from the process followed by that variable. This procedure notably simplifies the calculation method. In order to test the hypothesis of the evolution of traffic as a Geometric Brownian Motion, we have used the available series of traffic in Spanish highways, and we have applied the Augmented Dickey-Fuller approach, which is the most widely used test for this kind of study. The main result of the analysis is that we cannot reject the hypothesis that traffic follows a Geometric Brownian Motion in the majority of both toll highways and free highways in Spain.

Safety and operability of small fishing vessels: study of a series of stability-related accidents

The intact stability of five small Spanish fishing vessels with ages between 3 and 8 years old which sunk in stability related accidents between 2004 and 2007 is compared to the stability of the fishing vessels which were retired from service to build those. The seakeeping performance of both sets of vessels is also compared. The differences found between the results obtained by the two methods have been analyzed. The suitability of seakeeping methods to assess stability performance is discussed.

Fishing effort control regulations influence on stability, safety and operability of small fishing vessels: study of a series of stability related accidents occurred in Spain between 2004 and 2007

Entre los años 2004 y 2007 se hundieron por problemas de estabilidad cinco pesqueros españoles de pequeña eslora, de características parecidas, de relativamente poca edad, que habían sido construidos en un intervalo de pocos años. La mayoría de los tripulantes de esos pesqueros fallecieron o desaparecieron en esos accidentes. Este conjunto de accidentes tuvo bastante repercusión social y mediática. Entre ingenieros navales y marinos del sector de la pesca se relacionó estos accidentes con los condicionantes a los diseños de los pesqueros impuestos por la normativa de control de esfuerzo pesquero. Los accidentes fueron investigados y publicados sus correspondientes informes; en ellos no se exploró esta supuesta relación. Esta tesis pretende investigar la relación entre esos accidentes y los cambios de la normativa de esfuerzo pesquero. En la introducción se expone la normativa de control de esfuerzo pesquero analizada, se presentan datos sobre la estructura de la flota pesquera en España y su accidentalidad, y se detallan los criterios de estabilidad manejados durante el trabajo, explicando su relación con la seguridad de los pesqueros. Seguidamente se realiza un análisis estadístico de la siniestralidad en el sector de la pesca para establecer si el conjunto de accidentes estudiados supone una anomalía, o si por el contrario el conjunto de estos accidentes no es relevante desde el punto de vista estadístico. Se analiza la siniestralidad a partir de diversas bases de datos de buques pesqueros en España y se concluye que el conjunto de accidentes estudiados supone una anomalía estadística, ya que la probabilidad de ocurrencia de los cinco sucesos es muy baja considerando la frecuencia estimada de pérdidas de buques por estabilidad en el subsector de la flota pesquera en el que se encuadran los cinco buques perdidos. A continuación el trabajo se centra en la comparación de los buques accidentados con los buques pesqueros dados de baja para construir aquellos, según exige la normativa de control de esfuerzo pesquero; a estos últimos buques nos referiremos como “predecesores” de los buques accidentados. Se comparan las dimensiones principales de cada buque y de su predecesor, resultando que los buques accidentados comparten características de diseño comunes que son sensiblemente diferentes en los buques predecesores, y enlazando dichas características de diseño con los requisitos de la nueva normativa de control del esfuerzo pesquero bajo la que se construyeron estos barcos. Ello permite establecer una relación entre los accidentes y el mencionado cambio normativo. A continuación se compara el margen con que se cumplían los criterios reglamentarios de estabilidad entre los buques accidentados y los predecesores, encontrándose que en cuatro de los cinco casos los predecesores cumplían los criterios de estabilidad con mayor holgura que los buques accidentados. Los resultados obtenidos en este punto permiten establecer una relación entre el cambio de normativa de esfuerzo pesquero y la estabilidad de los buques. Los cinco buques accidentados cumplían con los criterios reglamentarios de estabilidad en vigor, lo que cuestiona la relación entre esos criterios y la seguridad. Por ello se extiende la comparativa entre pesqueros a dos nuevos campos relacionados con la estabilidad y la seguridad delos buques: • Movimientos a bordo (operatividad del buque), y • Criterios de estabilidad en condiciones meteorológicas adversas El estudio de la operatividad muestra que los buques accidentados tenían, en general, una mayor operatividad que sus predecesores, contrariamente a lo que sucedía con el cumplimiento de los criterios reglamentarios de estabilidad. Por último, se comprueba el desempeño de los diez buques en dos criterios específicos de estabilidad en caso de mal tiempo: el criterio IMO de viento y balance intenso, y un criterio de estabilidad de nueva generación, incluyendo la contribución original del autor de considerar agua en cubierta. Las tendencias observadas en estas dos comparativas son opuestas, lo que permite cuestionar la validez del último criterio sin un control exhaustivo de los parámetros de su formulación, poniendo de manifiesto la necesidad de más investigaciones sobre ese criterio antes de su adopción para uso regulatorio. El conjunto de estos resultados permite obtener una serie de conclusiones en la comparativa entre ambos conjuntos de buques pesqueros. Si bien los resultados de este trabajo no muestran que la aprobación de la nueva normativa de esfuerzo pesquero haya significado una merma general de seguridad en sectores enteros de la flota pesquera, sí se concluye que permitió que algunos diseños de buques pesqueros, posiblemente en busca de la mayor eficiencia compatible con dicha normativa, quedaran con una estabilidad precaria, poniendo de manifiesto que la relación entre seguridad y criterios de estabilidad no es unívoca, y la necesidad de que éstos evolucionen y se adapten a los nuevos diseños de buques pesqueros para continuar garantizando su seguridad. También se concluye que la estabilidad es un aspecto transversal del diseño de los buques, por lo que cualquier reforma normativa que afecte al diseño de los pesqueros o su forma de operar debería estar sujeta a evaluación por parte de las autoridades responsables de la seguridad marítima con carácter previo a su aprobación. ABSTRACT Between 2004 and 2007 five small Spanish fishing vessels sank in stability related accidents. These vessels had similar characteristics, had relatively short age, and had been built in a period of a few years. Most crewmembers of these five vessels died or disappeared in those accidents. This set of accidents had significant social and media impact. Among naval architects and seamen of the fishing sector these accidents were related to the design constraints imposed by the fishing control effort regulations. The accidents were investigated and the official reports issued; this alleged relationship was not explored. This thesis aims to investigate the relationship between those accidents and changes in fishing effort control regulations. In the introduction, the fishing effort control regulation is exposed, data of the Spanish fishing fleet structure and its accident rates are presented, and stability criteria dealt with in this work are explained, detailing its relationship with fishing vessel safety. A statistical analysis of the accident rates in the fishing sector in Spain is performed afterwards. The objective is determining whether the set of accidents studied constitute an anomaly or, on the contrary, they are not statistically relevant. Fishing vessels accident rates is analyzed from several fishing vessel databases in Spain. It is concluded that the set of studied accidents is statistically relevant, as the probability of occurrence of the five happenings is extremely low, considering the loss rates in the subsector of the Spanish fishing fleet where the studied vessels are fitted within. From this point the thesis focuses in comparing the vessels lost and the vessels that were decommissioned to build them as required by the fishing effort control regulation; these vessels will be referred to as “predecessors” of the sunk vessels. The main dimensions between each lost vessel and her predecessor are compared, leading to the conclusion that the lost vessels share design characteristics which are sensibly different from the predecessors, and linking these design characteristics with the requirements imposed by the new fishing control effort regulations. This allows establishing a relationship between the accidents and this regulation change. Then the margin in fulfilling the regulatory stability criteria among the vessels is compared, resulting, in four of the five cases, that predecessors meet the stability criteria with greater clearance than the sunk vessels. The results obtained at this point would establish a relationship between the change of fishing effort control regulation and the stability of vessels. The five lost vessels complied with the stability criteria in force, so the relation between these criteria and safety is put in question. Consequently, the comparison among vessels is extended to other fields related to safety and stability: • Motions onboard (operability), and • Specific stability criteria in rough weather The operability study shows that the lost vessels had in general greater operability than their predecessors, just the opposite as when comparing stability criteria. Finally, performance under specific rough weather stability criteria is checked. The criteria studied are the IMO Weather Criterion, and one of the 2nd generation stability criteria under development by IMO considering in this last case the presence of water on deck, which is an original contribution by the author. The observed trends in these two cases are opposite, allowing to put into question the last criterion validity without an exhaustive control of its formulation parameters; indicating that further research might be necessary before using it for regulatory purposes. The analysis of this set of results leads to some conclusions when comparing both groups of fishing vessels. While the results obtained are not conclusive in the sense that the entry into force of a new fishing effort control in 1998 caused a generalized safety reduction in whole sectors of the Spanish fishing fleet, it can be concluded that it opened the door for some vessel designs resulting with precarious stability. This evidences that the relation between safety and stability criteria is not univocal, so stability criteria needs to evolve for adapting to new fishing vessels designs so their safety is still guaranteed. It is also concluded that stability is a transversal aspect to ship design and operability, implying that any legislative reform affecting ship design or operating modes should be subjected to assessing by the authorities responsible for marine safety before being adopted.