 How many Enrons? Mark-ups in the stated capital cost of independent power producers' (IPPs') power projects in developing countriesAmol Phadke Energy, 2009, vol. 34, issue 11, 1917-1924 Abstract: I analyze the determinants of the stated capital cost of IPPs' power projects which significantly influences their price of power. I show that IPPs face a strong incentive to overstate their capital cost and argue that effective competition or regulatory scrutiny will limit the extent of the same. I analyze the stated capital costs of combined cycle gas turbine (CCGT) IPP projects in eight developing countries which became operational during 1990–2006 and find that the stated capital cost of projects selected without competitive bidding is 44–56% higher than those selected with competitive bidding, even after controlling for the effect of cost differences among projects. The extent to which the stated capital costs of projects selected without competitive bidding are higher compared those selected with competitive bidding, is a lower bound on the extent to which they are overstated. My results indicate the drawbacks associated with a policy of promoting private sector participation without an adequate focus on improving competition or regulation. Keywords: Power Sector Reforms; Independent power producers; Regulation; Power Projects; Competitive Bidding; Privatization (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:34:y:2009:i:11:p:1917-1924 DOI: 10.1016/j.energy.2009.07.043 Access Statistics for this article Energy is currently edited by Henrik Lund and Mark J. Kaiser More articles in Energy from Elsevier |
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