Abstract
Governments around the world are showing increasing interest in concessions or build-operate-transfer mechanisms in the highway sector. One or two decades ago, economic theory held that private funding was the most promising method for financing infrastructure development. Unfortunately, a significant number of privately financed projects are showing signs of difficulties (e.g., the Franco-British Channel Tunnel, the Dulles Greenway in Virginia, the second stage Bangkok Expressway in Thailand, the Guanzhour-Shenzen Highway in China, the delayed Birmingham Northern Relief Road in the United Kingdom, and the M1 and M3 Highways in Hungary). Emphasis has always been put on the financial aspect, leaving out the organizational one. A new basis for infrastructure finance is presented, analyzing the mistakes and successes of French experience in highway concession for more than 40 years. This experience is of interest since France has experimented with both toll and nontoll financing as well as with publicly and privately owned toll roads in building its system of highways. The main steps of the construction of the French highway network through concessions are traced and the lessons learned from this experience indicated, focusing on key elements, the advantages and drawbacks of a concession system, and the exact nature of the state’s role in concessioning. This information can serve as potential recommendations for other countries opting for concession systems.
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