X-factor estimation and controversies : the case of Lima´s airport
In theory, X-factor regulation provides better incentives for cost reduction than previously widely-used rate-of-return regulation. However, a deeper look into how this factor is effectively estimated shows the regulator enjoys a great deal of discretion, especially when selecting the methodologies...
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| Formato: | info:eu-repo/semantics/monograph |
| Lenguaje: | Inglés |
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Lima
2015
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| Acceso en línea: | http://hdl.handle.net/11354/431 http://biblioteca.clacso.edu.ar/gsdl/cgi-bin/library.cgi?a=d&c=pe/pe-014&d=11354431oai |
| Aporte de: |
| Sumario: | In theory, X-factor regulation provides better incentives for cost reduction than previously widely-used rate-of-return regulation. However, a deeper look into how this factor is effectively estimated shows the regulator enjoys a great deal of discretion, especially when selecting the methodologies used to estimate its components.
This paper describes how the X-factor is estimated in Peru and analyzes the main controversies (both theoretical al practical) that arose when the X factor for the country’s main airport was estimated. Conclusions are the following: i) careful planning of the concession process reduces the probability of unnecessary controversies when the X factor is estimated retrospectively, since this methodology requires data that needs to be collected at the time of the concession; ii) cost of capital estimation is a main source of controversies due to the subjective criteria used in its calculation and its impact in the final result; and, iii) transparent procedures improve the legitimacy of regulatory decisions, especially in contexts of limited public resources and weak institutions, typical of developing countries. [Abstract] |
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