2013 Session: 816

• Auctions for Private Congestible Infrastructures
  Abstract: This paper investigates regulation by auctions of private supply of congestible infrastructures in two networks settings: 1) two serial facilities, where the consumer has to use both in order to consume; and 2) two parallel facilities that are imperfect substitutes. There are four market structures: a monopoly and 3 duopolies that differ in how firms interact. The effects of an auction depend on what the bidders compete. With a bid auction, the bidders compete on how much money they transfer to the government. This auction leads to the same outcome as the unregulated game (for a given market structure), since this gives the maximum profit to transfer. An auction on the capacity of a facility leads to an even lower welfare than no regulation, because firms set very high capacities and usage fees. Conversely, an auction on generalised price or number of users leads to the first-best outcome. Moreover, these two auctions are robust: they attain the first-best regardless of whether the facilities are auctioned off to a single firm or to two firms, and for all market and network structures. On the contrary, the performances (relative to the first-best) of the bid and capacity auctions strongly depend on these considerations.
  Authors: van den Berg, Vincent A.C.
  Authors: van den Berg, Vincent A.C.
  Year: 2013
  Document Type: Paper
  Subject: Economics; Finance
  Session: 816
  Paper Number: 13-1823
• Dynamic Road Pricing for Revenue Maximization:Modeling Framework and Solution Methodology
  Abstract: This paper presents a modeling framework and solution methodology for the Dynamic Revenue Maximization Toll Problem (DRMTP). The problem requires determining the optimal time-varying toll prices for a multi-gantry toll road facility so that total revenue is maximized subject to agency-mandated constraints on average speed and average traffic volume. The framework extends a real-time traffic network state estimation and prediction system to provide dynamic pricing capabilities. The presented framework overcomes limitations of most existing approaches by considering: a) consistency between the toll value and the drivers' willingness to pay behavior; and b) drivers' route choice dynamics in terms of competition between the toll facility and alternative routes. The paper also presents the results of a set of simulation-based experiments that are conducted to examine the robustness of the proposed prices under several operational scenarios.
  Authors: Hassan, Ahmed; Abdelghany, Khaled F.; Semple, John
  Authors: Hassan, Ahmed; Abdelghany, Khaled F.; Semple, John
  Year: 2013
  Document Type: Paper
  Subject: Economics; Finance
  Session: 816
  Paper Number: 13-4118
• Study on Toll-Pricing Strategies for Managing Transportation Facilities in Design-Build-Finance-Operate Partnerships
  Abstract: In recent years, transportation planning has been challenged by increasing need for infrastructure development, a shortfall of revenue from the public sector, and political trending towards deregulation of transportation infrastructure development. These factors have led to increased interest in the privatization of transportation infrastructure and the development of public-private partnerships, such as Design Build-Finance-Operate (DBFO). Although the overall goal of a transportation infrastructure project is to provide safe, reliable transportation systems for the public, the parties involved in public-private partnerships take different roles and responsibilities. The public sector leads in laying out the terms and standards to regulate the obligations between the State DOTs and private entities. The private sector makes capital investment to provide agreed services as well as to assume various investment risks, including project operational and financial risks. Toll pricing strategies are a key component for the public sector to regulate operation of a PPP facility and for the private sector to control investment risks. This paper investigates the applicability of deterministic dynamic optimization models for determining toll-pricing strategies that can help improve mobility, reduce the overall cost of motorists, and attract the investment from the private sector. A case study of a DBFO project was carried out. The results showed that the proposed model provides a useful tool for both public and private sectors to make more informed decisions, including the study of optimal strategies to seek the investment return and the determination of the predefined contract regulations.
  Authors: Wu, Hui; Zhang, Zhanmin
  Authors: Wu, Hui; Zhang, Zhanmin
  Year: 2013
  Document Type: Paper
  Subject: Economics; Finance
  Session: 816
  Paper Number: 13-2865
  Practice-Ready: Yes
• General Framework for Evaluating Long-Term Leasing of Toll Roads: Case Study of Indiana I-90
  Abstract: One type of public-private partnerships (PPP), the long-term leasing of toll roads, is attracting greater attention of state governments since the two influential cases of Chicago Skyway and Indiana Toll Road in 2005 and 2006 respectively. In order to assist governments make appropriate decisions to enter PPPs that are in the best interest of taxpayers, this paper develops a general framework for evaluating the long-term leasing of toll roads. The two main decision criteria, the economic efficiency of privatization and the protection of public interest, are investigated. Economic efficiency is analyzed using an uncertainty-based Net Present Value (NPV). Further, a case study of the Indiana Toll Road lease is carried out. The NPV calculated using Monte Carlo simulation demonstrates that government is not likely to earn as much benefit as the upfront payment lease amount if it continued its in-house management of the toll road. Sensitivity analysis in terms of benefit and cost factors is also conducted. Further, a “break-even” analysis is conducted to examine the conditions under which the government would obtain as much benefit as it did from the privatization. Finally, the actions taken by the Indiana government attempting to protect the interest of Indiana citizens and toll road users are discussed.
  Authors: Zhang, Zhibo; Bai, Qiang; Labi, Samuel; Sinha, Kumares C.
  Authors: Zhang, Zhibo; Bai, Qiang; Labi, Samuel; Sinha, Kumares C.
  Year: 2013
  Document Type: Paper
  Subject: Economics; Finance
  Session: 816
  Paper Number: 13-4539
  Practice-Ready: Yes
• Auctions for Private Congestible Infrastructures
  Authors: van den Berg, Vincent
  Authors: van den Berg, Vincent
  Year: 2013
  Document Type: Presentation
  Subject: Economics; Finance
  Session: 816
  Paper Number: 13-1823
• Study on Toll-Pricing Strategies for Managing Transportation Facilities in Design-Build-Finance-Operate Partnerships
  Authors: Wu, Hui
  Authors: Wu, Hui
  Year: 2013
  Document Type: Presentation
  Subject: Economics; Finance
  Session: 816
  Paper Number: 13-2865
• Dynamic Road Pricing for Revenue Maximization: Modeling Framework and Solution Methodology
  Authors: Abdelghany, Khaled
  Authors: Abdelghany, Khaled
  Year: 2013
  Document Type: Presentation
  Subject: Economics; Finance
  Session: 816
  Paper Number: 13-4118
• General Framework for Evaluating Long-Term Leasing of Toll Roads: Case Study of Indiana I-90
  Authors: Zhang, Zhibo
  Authors: Zhang, Zhibo
  Year: 2013
  Document Type: Presentation
  Subject: Economics; Finance
  Session: 816
  Paper Number: 13-4539
• Presiding Officer
  Authors: Bergeron, Nancy
  Authors: Bergeron, Nancy
  Year: 2013
  Document Type: Presentation
  Subject: Economics; Finance
  Session: 816
  Paper Number: Z13-816