مقاله سال ۲۰۱۶

When the UK began privatization of its state owned utilities in the 1980s, rate of return regulation (RORR) was the form of price regulation most commonly used in the US for the regulation of privately owned utilities. Instead of US style RORR, the UK government introduced price cap regulation (PCR) for industries with no or limited competition. Proponents of PCR argued that RORR did not incentivize cost efficiency and often led to regulatory capture. PCR was held up as a superior form of price regulation where the regulator could delegate pricing decisions to the firm while providing it with the incentive to reap profit increases from cost reductions and productivity improvements.

Other types of incentive regulation include rate case moratoria, profit sharing, revenue sharing, banded RORR and yardstick regulation (Vogelsang, 2002). PCR became widely adopted as it combined simplicity with incentives for cost reductions and flexibility for price rebalancing (Sappington and Weisman, 2010; Gomez,
۲۰۱۳). PCR was subsequently applied to the UK privatized telecoms, electricity, gas, water, airports and railways sectors. PCR was also adopted by many other countries around the world as privatization of utilities and infrastructure gathered momentum from the 1990s.

PCR for airports was introduced for UK privatized airports in 1986. Since then, airports in several other countries have also been privatized and global airport players are increasingly making their presence felt (Graham, 2008a; Gillen, 2011). Different approaches to price regulation of airports have developed of which PCR is one variant. These approaches include light-handed regulation, price or revenue yield caps, rate of return regulation, earnings sharing, as well as choice of till (Forsyth et al., 2004). In countries where airport privatization is still in the early stages, the spectrum of airports and varied nature of regulatory regimes can be confusing and the lack of a general framework can itself become an obstacle to privatization.