Since road use has not been priced efficiently demand growth is likely to

Since road use has not been priced efficiently demand

This preview shows page 42 - 44 out of 62 pages.

Since road use has not been priced efficiently, demand growth is likely to outpace the capacity level, increasing future congestion externalities. However, since this A-59 road extension represents a regular piece of a road, not a special infrastructure item as for example a tunnel or a crossing, transaction costs (including technical, legal and political costs) of limiting access to this particular piece of infrastructure would be relatively high. Therefore, a separate tolling on this peace of road is unlikely to be a good option. Besides, introducing tolls on this short piece of road may distort the traffic allocation, diverting too much traffic to free roads. Therefore, 16 Negative (environmental) external effects are of a less issue in this case, because here we deal with a road improvement, not with a completely new road. 17 See the box ‘Traditional procurement versus PPP’ in section 0
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43 more comprehensive measures (including tolling other roads) may need to be considered as a solution to potential congestion issues on this route. 6.3 Wijkertunnel in the Netherlands This case study addresses the contractual arrangements for the Wijkertunnel and highlights market power issues in road provision. We first describe the Wijkertunnel facility and the project organization in section 6.3.1, followed by the discussion of both market and government failure issues and policy instruments to curb them in section 6.3.2. 6.3.1 Background and project organization The Wijkertunnel is a tunnel under the North Sea Canal near Amsterdam. It has been build in order to reduce the traffic load on the Velsertunnel. The construction work took three years, after which the tunnel was opened in 1996. The construction cost was about 600 mln dfl (272 mln euro). It is one of the first PPPs in the Netherlands. Three quarters of construction cost, 480 mln, were paid by the consortium of banks and insurers (including ING Bank, Nationale Nederlanden and the Commerzbank). This had to be compensated by the ‘shadow toll’, which will be paid by the Dutch Government over the period of 30 years, after which this tunnel will be transferred to the state at the symbolic amount of 1 dfl. 18 The shadow toll amount is set per car, therefore the payment of the state for this tunnel is sensitive for traffic volumes. The resulting risk is somewhat reduced by including in the contract the provision of a lower shadow tolls when the traffic increases significantly. The National General Accounting Office ( Algemene Rekenkamer ) argued that the estimates of the cost of this project for the state were very sensitive to computational assumptions (e.g., volume development and inflation rate), and that it was very likely that the government would eventually overpay for this project. They estimated that the government might eventually spend more on this tunnel than if the tunnel would be provided by the state 19 (AR, 1993).
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