Abstract
The private sector has been increasingly involved in the construction, management, and operation of water systems. There are several models for private-sector participation, but concessions have been made among the preferred choice of local, state, and federal governments. The literature identifies the uncertainty surrounding long-term, capital-intensive infrastructure projects as the main motives leading to renegotiations. The results of renegotiations are biased toward increasing tariffs, and compensation paid by the public sector only more rarely negatively affects the private partner. Renegotiations are perceived as being the main pitfall of concessions. This paper will analyze a unique data set of renegotiations of 31 water concessions in Portugal covering a period from 1995 to 2015. Results show that lower consumption and additional investments are among the main motives for renegotiation, which can occur at any point during the lifetime of a concession. The analysis confirms some initial hypotheses, such as larger concessions and longer contracts being more likely to be renegotiated. Indirectly, the occurrence of elections tends to increase renegotiations.
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Acknowledgments
The authors gratefully acknowledge the financial support received from Fundação para a Ciência e Tecnologia (FCT) (Portugal), and the national funding obtained through a research grant (UID/SOC/04521/2013).
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Published In
Journal of Water Resources Planning and Management
Volume 144 • Issue 11 • November 2018
Copyright
©2018 American Society of Civil Engineers.
History
Received: Sep 22, 2017
Accepted: May 23, 2018
Published online: Sep 13, 2018
Published in print: Nov 1, 2018
Discussion open until: Feb 13, 2019
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