Disincentivising overbidding for toll road concessions

A1 │ INTERVIEW QUESTIONS
A11
Interview questions
Disincentivising overbidding for Toll Road Concessions
A study on behalf of the Australian Department of Transport by RBconsult and Oxera
Information Sheet for Interviewees
Notes:
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With your permission we will record the interview (for our internal purposes only).
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Neither you nor your employer will be identified in our report.
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Any quotes used will be non-attributable.
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You will have a chance to see and approve any text we wish to include in our report.
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Frank and candid views are encouraged.
Background:
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The Australian toll roads sector has long suffered from overbidding (bid submissions based on
over-optimistic projections of demand and revenue).
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The Government is looking at ways in which overbidding might be avoided.
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Our focus is outward-looking; examining lessons from around the world that might be used to guide future
practice, project design, transaction structuring, procurement, bid evaluation and contract award.
Topics for Discussion:
From your experience:
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What is the single biggest issue that leads to overbidding
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To what extent are public sector procurers observed to learn from previous experiences
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Is a track record of not re-negotiating concessions contracts sufficient to deter overbidding or do there need to
be contractual commitments not to re-negotiate
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Is the traditional auction theory literature, in particular common value auctions and the winner’s curse, applicable
to the case of toll road concessions
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To what extent does the design of the concession (eg. who is responsible for operation and maintenance, how
operators are remunerated for their up-front investments) incentivise overbidding
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Can insights into the problem be drawn from behavioural economics or other sectors
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