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Extra resources for Transport Services-the Limits of (De)regulation (Ecmt Round Tables)

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In developing and transition economies, concessions are the most common form of private sector participation in transport. Table 3 illustrates that concession contracts accounted for 56 per cent of all transport projects between 1990 and 2001. It also shows that while Latin America and East Asia are the most active in promoting concessions, greenfield projects have been quite successful in East Asia over the last eleven years or so. The Middle East has been the least effective (or maybe the least interested) at building a partnership with the private sector in transport, although there was some activity in private ports.

The rationale to consider quality as an important dimension in the redesign of regulation rests on the evidence of its “adjustment lever” nature. Private concessionaires may take advantage and reduce the quality of the service provided because they may find it commercially convenient to save on costs or because informational advantages and the difficulty of monitoring service levels make it easy not to comply with pre-agreed quality-related standards. g. under a licence agreement as the sole operator in a given route) may exploit monopoly power and adjust service quality according to demand responsiveness.

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