Developing and Testing a Framework for Alternative Ownership, Tenure and Governance Strategies for the Proposed Detroit-Windsor River Crossing. Phase II Report

摘要

Transportation infrastructures are integral parts of a nations network connectivity. Largescale transportation projects represent major investments devoted to the construction, operation, and maintenance of facilities over an extended period. Typically, these investments are irreversible in nature and require long-term commitment by the public at large relative to utilization, maintenance, and operation. Traditional economic analysis techniques are based upon the assumption of future cash flows that are fully deterministic in nature. Thus, there is an implicit assumption that these cash flows are not subject to any risk or uncertainty during the life of the project. In reality, many of these infrastructure projects are associated with significant uncertainties stemming from lack of knowledge about future cost streams. Revenue generation is also characterized by demand uncertainty. In emerging markets, macroeconomic, legal, institutional and regulatory concerns may add a level of uncertainty that can add complexities and introduce greater levels of risk. The term risk refers to situations where the decision maker can assign mathematical probabilities to the randomness relative to future outcomes. In contrast, the term uncertainty refers to situations when this randomness cannot be expressed in terms of mathematical probabilities. Transportation decisions have not typically considered risks and uncertainties in investment analysis. Current transportation literature does not indicate the availability of a comprehensive methodology in dealing with risks and uncertainties, though significant research has been conducted in economics, industrial engineering and financial management. This research presents an analytic framework that can explore the merits and demerits associated with public and/or private ownership of a transportation infrastructure, where potentials for cost recovery through revenues generated appear to be high, even though the project may be fraught with risks at the other. The framework also explores various forms of joint ownership associated with the public and private enterprise. Ownership, Tenure & Governance (OTG) are three terms that incorporate the role of each entity in a strategy, where a number of OTG strategies are considered to encourage joint entity participation. The strategies vary in the degree of participation by the public and the private entity.