Carmichael, D G; Nguyen, T A and Shen, X (2019) Single treatment of PPP road project options. Journal of Construction Engineering and Management, 145(2): 04018122, ISSN 0733-9364
Abstract
Recent publications have shown the role that options play in addressing the uncertainty, risk, and fairness in public-private partnership (PPP or P3) agreements in toll road projects. Typically, the literature uses financial market options techniques and applies these by analogy. Each option is presented and analyzed in standalone papers. In contrast, this paper presents an original single unifying approach for analyzing all PPP toll road options, an approach based on discounted probabilistic cash flows. The approach is a straightforward extension of conventional engineering viability analysis of projects, and does not rely on the financial market options literature. It offers a ready way to evaluate multiple options, requires minimal financial and mathematical knowledge, and hence can be readily implemented by practitioners. The paper also serves as a state-of-the-art literature summary as related to options in PPP toll road projects. The paper will be of interest to anyone involved in PPP toll road projects.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | build-own-operate-transfer; financial agreements; options; public-private partnership; toll roads; unified treatment |
| Index terms: | road project, fairness, cash flow, partnership, publication, option, toll, agreements, practitioner, build-own-operate-transfer, state of the art |
| Subjects: | decision analysis, partnership management, contract formation, financial management, research dissemination and communication, infrastructure engineering, leadership, practitioner, transportation engineering, contractual arrangements |
| Topics: | Stakeholder Management, Risk Management, Roles and Professions, Research Practice, Organizational Design, Engineering Principles, Information Management, Contract Administration, Procurement, Cost Management |
| Descriptive scope: | 2 PC |
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