nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2007‒09‒24
three papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Estimating global climate change impacts on hydropower projects : applications in India, Sri Lanka and Vietnam By IIMI, Atsushi
  2. Políticas de Apoio Financeiro à Inovação Tecnológica: Avaliação dos Programas MCT/Finep para Empresas de Pequeno Porte By José Mauro de Morais
  3. A Eficiência do Estado e as Concessões Rodoviárias no Brasil: Preocupação com o valor do pedágio e sugestões para operacionalizar a modicidade das tarifas By Carlos Álvares da Silva Campos Neto; Ricardo Pereira Soares

  1. By: IIMI, Atsushi
    Abstract: The world is faced with considerable risk and uncertainty about climate c hange. Particular attention has been paid increasingly to hydropower generation in recent years because it is renewable energy. However, hydropower is among the most vulnerable industries to changes in global and regional climate. This paper aims to examine the possibility of applying a simple vector autoregressive model to forecast future hydrological series and evaluate the resulting impact on hydropower projects. Three projects are considered - in India, Sri Lanka, and Vietnam. The results are still tentative in terms of both methodology and implications; but the analysis shows that the calibrated dynamic forecasts of hydrological series are much different from the conventional reference points in the 90 percent dependable year. The paper also finds that hydrological discharges tend to increase with rainfall and decrease with temperature. The rainy season would likely have higher water levels, but in the lean season water resources would become even more limited. The amount of energy generated would be affected to a certain extent, but the project viability may not change so much. Comparing the three cases, it is suggested that having larger installed capacity and some storage capacity might be useful to accommodate future hydrological series and seasonality. A broader assessment will be called for at the project preparation stage.
    Keywords: Climate Change,Hydro Power,Energy Production and Transportation,Water and Energy,Global Environment Facility
    Date: 2007–09–01
  2. By: José Mauro de Morais
    Abstract: This paper evaluates the main programs of the Science and Technology Department (MCT) designed to give financial support for micro and small business. The programs, conducted by the technology development agency of the MCT, Financiadora de Estudos e Projetos (Finep), are the following: i) Zero Interest Rate Program, ii) Pappe - Program to Support Small Enterprises Research, iii) Pappe - Economic Subvention for Small Enterprise, iv) Economic Subvention for Enterprises ? with reserved funds earmarked for small enterprises, v) Finep/Sebrae partnership to support innovation projects in small enterprises, in cooperation with Science and Technology Institutions; vi) Inovar Project, a program directed to the development of venture capital and seed capital funds. To subsidize the analyses of the programs, developed in section five, the paper discusses, in section two, the difficulties of small firms in accessing conventional credit, and presents a conceptual model of the main types of equity financing for small firms, associated to their business life cycle. Section three reviews information about the support for research and innovation for small enterprises in some countries, and describes interesting experiences of programs to develop the venture capital market. Section four reviews the new Brazilian legislation directed for supporting research and innovation processes in the productive sector, which are made up of the following policy instruments and legislation: Funds for Science and Technology; Brazilian Industrial Technological and Trade Policy (PITCE); Law 10.973/2004 Foreign (Innovation Law) and the Micro and Small Firms? Statute, recently approved by the National Congress. Section six presents the summary and the final comments.
    Date: 2007–08
  3. By: Carlos Álvares da Silva Campos Neto; Ricardo Pereira Soares
    Abstract: The granting of highway concession in Brazil has been motivated by the shortage of public funds, which led the Union and some states to give out concessions of about 10.500 km of highway to be operated by private enterprises. This occurred between 1994 and 1999. It has been observed that among the five concessions given out by the federal government a real increase in the toll fee has occurred. This increase outperformed the inflation index variation IPCA/IBGE by 45%, between 1995 and 2006. It has become evident that the persistent real gains in the toll fees throughout time are related to highway concession contract norms, mainly the ones concerned with economic financial ratio. The concept of economic financial ratio, which appeals to the private sector, was studied and set in motion. On the other hand, the need of a more even minded treatment regarding consumer interests as the concept of affordable tariffs did not receive due attention. By means of this study, the authors propose a new concept for toll affordability: a principle that allows, during the period of contract, users to share economic gains, productivity gains with the leaser of a concession, as well as additional revenue gains obtained concession undertakings. According to this concept toll affordability will be defined at the revenue end, that is, additional revenues to the foreseen ones and economic gains must be shared with the users. It must be pointed out that economic financial ratio is first of all operative in terms of protection for leaders of concession cost alterations. Thus, the economic financial ratio protects the leaser of a concession regarding cost impacts and toll moderateness benefits users by sharing of economic gains, productivity and additional revenue. Therefore, these are principles that complement each other. The concession granting power would gain efficiency in its regulatory function if it incorporated four alternatives aiming at operating the toll affordability concept to be implemented by the firms within the concession contracts: Repay part of the productivity gains to the leaser of the concession, share the risk of number of vehicles between the leaser of the concession and users, share additional revenues between the leaser of the concession and users, and, pay back in terms of price variation part of the economic gains stemming from credit risk reduction. The study suggests that a mechanism which can be adapted in order to encourage competition between firms active in natural monopoly markets is a dispute by means of concessions, provided that tenders are designed for compatible durations according to expectations of revenues and investments in each project. Duration adequateness, beside the expected benefits for the users would create additional benefits, because it diminished the entrance barrier for the highway concession business. To comply with this suggestion the issue of concessions´ duration must be treated when set out for tender like a variable with economic characteristics. For each project the duration of contract should be related to the size of the necessary investments as well as to the return rate on investment and the demand (number of vehicles), all part of the calculus to determine the time needed to pay back the initial investment of the project.
    Date: 2007–06

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