Financial valuation methods in a world under political control: the case of the Canal du Midi (1897-1901)

Jean-Guy Degos

International Journal of Economics and Accounting, 2014, vol. 5, issue 2, 165-189

Abstract: The French canal du Midi, built by Pierre-Paul Riquet in the 17th century was the greatest construction project of its time. It enjoyed a natural monopoly and was protected because the other transport competitors were not able to challenge it for many years. The vagaries of three centuries of economic progress and political changes, associated with the considerable development of railway and road transport have limited its benefits. Revolutions and the French Republic weakened its position. Its owners were obliged to sell their property to the French State, because they were engaging in bad business and the government of the 19th century insisted control of all means of transport in the event of possible wars. Its sale resulted in contradictory analyses that enable to take on the old techniques of evaluation of assets with very long operating timelines.

Keywords: arbitration; waterways; railways; contestable market; natural monopoly; evaluation methods; perpetual annuity; financial valuation; political control; Canal du Midi; infrastructure projects; historical projects. (search for similar items in EconPapers)
Date: 2014
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