Highway Concessions and Road safety: Evidence from Brazil

Abstract

Reducing road fatalities is a key policy concern in several countries. Nonetheless, there is limited evidence on whether highway concessions and Public Private Partnerships (PPP) can bring road safety benefits, despite the growing number of countries adopting this policy to finance and manage road infrastructure. In this paper, we use a difference-in-differences approach to examine the causal effect of highway concessions on road safety outcomes using daily crash data from Brazilian Federal highways between 2007-2017. We find that concessions significantly improve road safety measures, including fatality rates and the number of people and vehicles involved in crashes. On average, procured roads had 15 fewer deaths then publicly managed highways for every 1000 crashes each year, and avoided 16 thousand deaths between 2007-2017. Moreover, these effects are marginally larger for every additional year of treatment but only become statistically significant a few years after the concession implementation. Finally, our results suggest that including safety-based incentives in concession contracts can substantially improve road safety performance

Toll road sector in Brazil: Regulation by contract and recent innovations

“…In the ‘90s, Brazil set up the first round of highways concessions, both at national and subnational levels (Garcia-Escribano et al, 2015). Currently, Brazil has more than 22,000 km of toll-based (user pay principle) highways managed by the private sector under contractual agreements (Alves et al, 2021). The private managed network is critical to Brazil’s logistic system, carrying about two-thirds of all domestic truck cargo.…”

“…On the one hand, it is widely accepted that bringing the private sector through toll road PPPs has allowed significant investments that would not be possible solely relying on the public sector (Neto et al, 2019). Users’ surveys also indicate that private managed highways are perceived to have a better infrastructure and quality of service than publicly administered road stretches, and some literature has provided evidence of lower fatalities on PPP managed roads (e.g., Alves et al, 2021). ABCR (2018) shows that 74.5% of PPPs are considered to have great/good quality of service in comparison with 26.6% of public roads.…”

Influência da gestão e jurisdição das rodovias em relação a sua qualidade funcional

“…Entretanto, Alves et al (2021) destacam que as concessões das rodovias promovem uma redução pequena, mas significativa, no número e na fatalidade de acidentes rodoviários, bem como no número de pessoas e veículos envolvidos nos acidentes.…”