The regulatory function in public-private partnerships for the provision of transport infrastructure

A wide range of contractual arrangements are increasingly being used by the public sector to materialise the delegation of transport infrastructure provision tasks to the private sector, over long periods of time. This paper addresses the issue of transport infrastructure regulation in the specific context of public-private settings. Starting by the discussion on the concept of Public-Private Partnership (PPP) it is stressed that, despite the different meanings that can be found in the literature, it is possible to define a PPP by using a core group of characteristics, such as the bundling of services and the transference of a relevant part of the risks to the private sector on a long term basis. Regarding the action of the regulator, we look at three dimensions of efficiency that are expected to be pursued at the strategic level of regulatory action. However, it is acknowledged that the regulatory function is in practice rather complex since it requires balancing a multiplicity of other objectives or goals, which may vary according to specific economic conditions. In the domain of pricing, the review carried out suggests that since “first best” assumptions are not met in the “real world” it hardly seems possible that the short run marginal cost pricing “canon” could be directly used to shape pricing policies. Consequently, when considering the application of the standard neoclassical marginal cost pricing approach it is pertinent to ask whether the second best solutions can lead to efficient outcomes that might be accepted by the stakeholders. Bundling construction and maintenance tasks into a single long term contract, which is a typical characteristic of “standard” PPPs, could theoretically bring cost benefits since it allows for the possible internalization of any positive externalities that may be generated during the whole project life cycle. The economic rationale for the bundling of construction/maintenance with financing services is that it enhances the likelihood of submission of realistic bids at the procurement stage. In addition, the chances of the contractor sticking to the agreed contractual terms, after contract award, are potentially increased given the higher exposure to financial risk.     

Applying social marginal costs pricing to the road sector

This chapter, following the results of the case studies analyzed in the Enact project, will identify and analyze the implications of the possible application of SMCP in PPP’s in the road sector. The main issues analyzed include SMCP revenue formation and its ability to finance the PPP. The paper will focus on market and competition issues like: 1) the problems due to mispriced substitutes; 2) the interdependencies between the tolls and the capacity of different road infrastructures when these are competing for the same demand; 3) since short run social marginal costs do not repay for the investments costs (except in special cases), in the case tolls should cover also the investment costs this will lead to totally different pricing schemes between roads in a same area, with problem of demand shift toward cheaper existing infrastructures, therefore increasing the problem of cost recovery. The incentives caused by the introduction of prices based on SMC’s are also investigated.     

Development of and prospects for cruising in Europe

This paper evaluates the development of prospects for cruising in Europe. It examines this within the broad framework of economic theory and maritime economics. Initially, the market structures and relationships applicable to cruising are considered with particular attention being paid to the linkages between the shipping markets and tourism and leisure. This conceptual analysis suggests that whilst cruising has a strong shipping element it does not fall exclusively within the classic framework of maritime economics but draws from both shipping and tourism and leisure. For reasons of clarity, a number of definitions are also provided covering maritime tourism and leisure, cruising, and supply and demand, as it relates to cruising. Following this, an overview of the cruise industry is included. This focuses primarily on the growth in the demand both world wide and at regional level. In particular, the analysis places the development of cruising in Europe in market perspective. Subsequently, the development of cruising in the UK is examined as a case study. Initially, UK market growth is analysed and it can be seen that the UK is now the second largest cruise market in the world after North America. Projections of the growth in UK demand to 2003 are also provided. The growth in supply is also studied and the UK targeted fleet is identified. In addition, the question of ownership is addressed. The prospects of employment for UK seafarers within the cruise industry are also considered and results obtained from the analysis suggest that it should be possible to increase the participation of UK and other European seafarers within the cruise industry at all levels and in all departments. In the final section of the paper, the position of UK ports as terminals and destinations is evaluated. It is concluded that the fundamentals of the cruise business remain strong, and continued growth by the industry should be possible for the foreseeable future.     

Supply and demand of new oil tankers

This paper examines the world-wide supply and demand for new oil tankers. A simultaneous supply and demand model is developed and estimated using two-stage least squares techniques and empirical data from 1972 to 1983. The relationships between tanker newbuilding orders and prices, and other relevant market factors are analysed. Major factors affecting the tanker new building market are identified. The results indicate that: oil price and second-hand tanker price are predominant factors influencing future newbuilding demand; a moderate decrease in laid-up tonnage would not induce a significant increase in newbuilding orders; shipbuilding capacity is a more influential factor for the short-run supply of new tankers than shipbuilding cost. Technological change has also played an important role in the market.     

Development of and prospects for cruising in Europe

This paper evaluates the development of prospects for cruising in Europe. It examines this within the broad framework of economic theory and maritime economics. Initially, the market structures and relationships applicable to cruising are considered with particular attention being paid to the linkages between the shipping markets and tourism and leisure. This conceptual analysis suggests that whilst cruising has a strong shipping element it does not fall exclusively within the classic framework of maritime economics but draws from both shipping and tourism and leisure. For reasons of clarity, a number of definitions are also provided covering maritime tourism and leisure, cruising, and supply and demand, as it relates to cruising. Following this, an overview of the cruise industry is included. This focuses primarily on the growth in the demand both world wide and at regional level. In particular, the analysis places the development of cruising in Europe in market perspective. Subsequently, the development of cruising in the UK is examined as a case study. Initially, UK market growth is analysed and it can be seen that the UK is now the second largest cruise market in the world after North America. Projections of the growth in UK demand to 2003 are also provided. The growth in supply is also studied and the UK targeted fleet is identified. In addition, the question of ownership is addressed. The prospects of employment for UK seafarers within the cruise industry are also considered and results obtained from the analysis suggest that it should be possible to increase the participation of UK and other European seafarers within the cruise industry at all levels and in all departments. In the final section of the paper, the position of UK ports as terminals and destinations is evaluated. It is concluded that the fundamentals of the cruise business remain strong, and continued growth by the industry should be possible for the foreseeable future.     

The economics of port pricing

This short paper is concerned with the problem of improving the methods currently used to price port facilities. It presents a simple economic model of how an optimal pricing policy may be arrived at, employing an adaptation of an interactive supply-demand framework initially developed in the context of allocating car-parking places in urban areas. The model demonstrates the basic economic tenet that charges should be set equal to the full marginal social opportunity cost (M.S.O.C.) of facilities used, with premiums added where capacity restrictions would otherwise lead to excessive queueing. The use of a probability demand curve shows that one of the main fears of the anti-pricing school, namely excessive resource misallocation due to miscalcuations of the marginal cost, tends to be exaggerated. Further, it is argued that many of the other arguments set out against marginal cost pricing of ports are either ill-founded or unlikely to be of practical importance—ports are little different to other goods and services consumed in the economy and standard economic policies apply to them.     

The economics of port pricing

This short paper is concerned with the problem of improving the methods currently used to price port facilities. It presents a simple economic model of how an optimal pricing policy may be arrived at, employing an adaptation of an interactive supply-demand framework initially developed in the context of allocating car-parking places in urban areas. The model demonstrates the basic economic tenet that charges should be set equal to the full marginal social opportunity cost (M.S.O.C.) of facilities used, with premiums added where capacity restrictions would otherwise lead to excessive queueing. The use of a probability demand curve shows that one of the main fears of the anti-pricing school, namely excessive resource misallocation due to miscalcuations of the marginal cost, tends to be exaggerated. Further, it is argued that many of the other arguments set out against marginal cost pricing of ports are either ill-founded or unlikely to be of practical importance—ports are little different to other goods and services consumed in the economy and standard economic policies apply to them.     

Rail access charges in France: Beyond the opposition between competition and financing

Access charges to the railway infrastructures, and in particular of the high speed lines, poses many theoretical and practical questions. Besides the need to decide whether it is better to apply a principle of marginal cost or a full cost approach, a difficulty arises with regard to the possibilities of competition between various operators. France is especially affected by this problem since access charges are particularly high while at the same time competition is non-existent. Is this absence of competition explained by the high level of access charges? After describing the principles which underlie the pricing scheme for high speed trains in France, this paper attempts to find out if these tolls constitute a barrier to entry. After building a model that summarizes the components of supply and demand on the Paris–Lyon journey, this paper shows that the considerations relating to demand (peak hour or off-peak hour) are more fundamental than access charges, which do not in themselves constitute a barrier to entry. Barriers exist, but they involve access charges in relation to the allocation of slots which would make it possible to guarantee certain profitability to a new entrant. Break-even points are proposed which show that SNCF's potential competitors have margins for manoeuvre.     

A dynamic model for marginal cost pricing of port infrastructures

ABSTRACT

A dynamic model for marginal cost pricing of port infrastructures links costs to system performance by combining a power-law function with time-dependent queueing analysis. Additionally, the model incorporates the marginal cost of capacity, including the effects of economies of scale. This allows the calculation of the marginal cost price under a dynamic framework. The model accounts for nonlinear behaviour of port demand, which is sensitive to price and service levels. The effects over time of cost and service levels on the port’s operational performance are quantified. The proposed model allows determining the optimal timing for capacity investment. The model is a starting point for the application of marginal cost pricing to ports. However, for practical application of such pricing method it is necessary to apply a system’s approach, as productivity and costs must be assessed at the terminal’s component level. This should allow the derivation of a marginal cost function at the terminal’s component level.     

The market for ship demolition

Little has been written about the ship demolition market, an essential element in the supply/demand balance for shipping. Either technical or economic obsolescence may be the cause for scrapping a ship, where the latter is strongly influenced not only by anticipated freight market levels, but the rate at which more efficient ships are being introduced. The scrap value of a ship is a function both of the realizable value of the materials within the ship and cost of demolition. Both are strongly influenced by the cost structures prevailing in the likely country of demolition. The paper explores not only the fundamentals of the ship demolition market, but the trends from the 1960s to the present. The shipbreaking market has moved in that time from being West European-centred to Asian-centred, concentrating for some years in Taiwan, but now shifting to the Indian subcontinent.     

Black Boxes - Pathetic progress but some success now in sight

Little has been written about the ship demolition market, an essential element in the supply/demand balance for shipping. Either technical or economic obsolescence may be the cause for scrapping a ship, where the latter is strongly influenced not only by anticipated freight market levels, but the rate at which more efficient ships are being introduced. The scrap value of a ship is a function both of the realizable value of the materials within the ship and cost of demolition. Both are strongly influenced by the cost structures prevailing in the likely country of demolition. The paper explores not only the fundamentals of the ship demolition market, but the trends from the 1960s to the present. The shipbreaking market has moved in that time from being West European-centred to Asian-centred, concentrating for some years in Taiwan, but now shifting to the Indian subcontinent.     

Evaluating the long term impacts of transport policy: The case of passenger rail privatisation

Britain's national rail system was ‘privatised’ as a result of the 1993 Railways Act, with most of the organisational and ownership changes implemented by 1997. This paper examines the long term impacts of these changes. A key issue when examining long term changes is that of the counterfactual – what would have happened if the changes had not occurred? A simple econometric model of the demand for passenger rail services was developed and used in conjunction with extrapolative methods for key variables such as fares and train km to determine demand-side counterfactuals. Extrapolative methods were also used to determine counterfactual infrastructure and train operation costs. Although our results are sensitive to the assumptions we have made concerning the counterfactual they suggest a number of impacts. Since privatisation, rail demand has grown strongly but our analysis indicates that transitional disruptions suppressed demand by around 9% over a prolonged period (1992/3 to 2005/6), whilst the Hatfield accident reduced demand by about 5%, albeit over a shorter period (2000/1 to 2006/7). A welfare analysis suggests that although consumers seem to have gained as a result of privatisation, for most years this has been offset by increases in costs. An exception is provided by the two years immediately before the Hatfield accident. Overall the loss in welfare since the reforms were introduced far exceeds the net receipts from the sale of rail businesses. Thus although the reforms have had advantages in terms of lower fares and better service levels than otherwise would have been the case, this appears to have been offset by increased infrastructure and train operations costs. The source of these high costs remains an area of speculation but appear to be related to aspects of both market and regulatory failure.     

小型LNG运输船在中国的发展前景

我国的经济发展使得国内市场对天然气的需求量急剧增大。我国的天然气国内开发供应缺口将长期存在,中国的进口液化天然气总量将会逐年增加。合理的将LNG分配到沿海、沿江的终端用户需要一种创新的LNG产业链,LNG在我国的二程转运将会是一个新兴的市场。小型LNG运输船在这一产业链中起着重要作用,因此市场迫切需要适合我国国内贸易的这种新船型。     

The bulk shipping business: market cycles and shipowners’ biases

Despite a strong linkage with the macro-economic course, the bulk shipping market, in the short period, follows a typical cyclic pattern, where continuous freight adjustments balance demand and supply movements.

In this context—widely unstable but quite regular in its general scheme—the shipowners may have enough competencies and information to take logical and consistent decisions about ship purchasing and chartering.

Yet, why do they periodically make mistakes?

The analysis of shipowners’ behaviour provides a reasonable answer: mistakes incur when they ignore or undervalue the market trends, following their personal intuition or even unwisely imitating their competitors.

The analysis of the Handysize segment among the bulk shipping business offers a significant example of the lack of timeliness in shipowners' behaviour: after a long period of disregard, operators began to notice the opportunities of this market niche and they are now heavily investing in minor units. Maybe it's not too late, but the market has already changed and only a few brave—or lucky—shipowners took advantage of the magic moment.     

Port pricing: a cost axiomatic approach

The earlier port pricing literature argued that port prices should be based uponk marginal cost pricing. However, recent literature suggests that a conflicts would arise between marginal cost pricing and full cost recovery at ports. Further, problems arise in determining or estimating marginal costs. A price structure that addresses the problems of port marginal cost pricing is cost axiomatic pricing, given the goals, objectives and constraints of ports. Fairness and cost efficiency cost axioms for ports are considered. A methodology for determining cost axiomatic prices for a marine container terminal is presented.     

国际干散货航运市场回顾与展望

自2003年10月份以来,国际干散货航运市场表现十分强劲,但从2005年的BDI指数走势来看,这种高景气度已有明显的见顶迹象,对于国际干散货航运市场能否持续高涨的行情,说法众多不一。首先对国际干散货航运市场进行回顾,并针对与干散货航运市场关系密切的世界经济以及国际干散货航运市场供需两方面进行分析,最后对2006年国际干散货航运市场的发展加以展望。     

国际原油价格攀升对国际航运市场的影响

分析了影响国际原油价格的供需、金融和地缘政治三个因素,并预测未来原油价格仍将持续上涨.通过计量分析,国际原油价格每增长一个百分点,将导致世界GDP下降0.13％.按照2008年世界GDP的水准,将最终导致国际航运需求年均下降约2亿吨的需求量.而需求持续下降,导致航运市场供给大于需求.为了降低供给,减少原油成本,国际航运效率将大幅下降.     

The bulk shipping business: market cycles and shipowners' biases

Despite a strong linkage with the macro-economic course, the bulk shipping market, in the short period, follows a typical cyclic pattern, where continuous freight adjustments balance demand and supply movements.

In this context—widely unstable but quite regular in its general scheme—the shipowners may have enough competencies and information to take logical and consistent decisions about ship purchasing and chartering.

Yet, why do they periodically make mistakes?

The analysis of shipowners' behaviour provides a reasonable answer: mistakes incur when they ignore or undervalue the market trends, following their personal intuition or even unwisely imitating their competitors.

The analysis of the Handysize segment among the bulk shipping business offers a significant example of the lack of timeliness in shipowners' behaviour: after a long period of disregard, operators began to notice the opportunities of this market niche and they are now heavily investing in minor units. Maybe it's not too late, but the market has already changed and only a few brave—or lucky—shipowners took advantage of the magic moment.     

2006年国际干散货运输市场走势预测

2005年国际干散货运输市场总体表现为前高后低、中间大幅调整、波动剧烈等特征。对于2006年的市场走势,业界已达成调整下降的共识,但调整的幅度、下降的速度观点不一。通过宏观和微观两个方面分析世界和中国经济的发展、钢铁业的走势、需求与供给、市场面临的风险,综合预测2006年国际干散货运输市场的走势。     

Ten years after bus deregulation in Japan: An analysis of institutional changes and cost efficiency

The local bus market in Japan was deregulated in 2002. This study examines the impact of this deregulation on the market structure and the operators' cost efficiency over the last ten years. First, we perform a qualitative before-and-after-deregulation analysis of Japan's bus market, finding that there has been little change in the structure of the Japanese bus market so far. Second, we investigate the effectiveness of the deregulation and internal organisational factors by using a dataset of publicly owned (municipal) bus companies. We estimate the total cost frontier functions in order to examine their effects, showing that it is the internal organisational factors (i.e. governance structure) that affect the operator's efficiency, not deregulation. In fact, the coefficient of subsidies to companies is positive, with statistical significance, thereby suggesting that cost efficiency decreases as the subsidy ratio increases. The coefficient of the contracting-out (MCGL) dummy also obtains statistically significant results; thus, we provide an account of how contracting out clearly improves operators' cost efficiency. The deregulation variable did not show significant results.