Case #1400.1

Buenos Aires-Colonia Bridge (Sequel)

Publication Date: August 01, 1998
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Abstract:
This case recounts the work of a special Argentina-Uruguay bi-national commission convened to examine the economics of a proposed bridge that would link the two countries. The bridge being considered by commission officials in the spring of 1996 was to extend 41 kilometers across the River Plata estuary, from Buenos Aires to the Uruguay city of Colonias. It would be by far the longest in the world. The case recreates the problem as faced by the commission, which had to consider whether it would make financial sense for a private concessionaire to build and operate the bridge. Specifically, bridge commission staff had to critique the work and recommendations of a private consulting firm whose market projects led it to conclude that the US$1 billion bridge could successfully be financed by tolls of US$60 per car.

Learning Objective:
The case calls for an understanding of such economics concepts as pricing and net present value, as well as the construction of alternative income and demand scenarios.

Other Details

Case Author:
Jose Gomez-Ibanez
Faculty Lead:
Jose Gomez-Ibanez
Pages (incl. exhibits):
8
Setting:
South America
Language:
English