Traffic Risk in toll motorway concessions in Spain: An analysis of the ramp-up period.

Abstract

This paper analyzes the behaviour of actual traffic versus the traffic declared by the concessionaire in its offer in toll motorway concessions in Spain during the first few years of operation (ramp-up period). We obtain the result that, on average, there is a clear bias towards overestimation though the behaviour of any single concession may not have much to do with the average. In addition, we found that unlike what happens with annual traffic volumes, traffic growth rates are mostly underestimated by concessionaires in the ramp-up period. We explain this trend towards overestimation in the strategic behaviour of the bidders in the tender rather than in systematic modelling errors. The cause of this strategic behaviour lies in the willingness to renegotiate as shown by the government of Spain when actual traffic turns out to be lower than expected