Woodhead, R M and Downs, C G (2002) Facilitation as a research method to improve value management capabilities. Journal of Construction Research, 3(2), pp. 209-216. ISSN 1609-9451
Abstract
This paper describes how facilitation, as distinct from focus groups, was used as a research method in a workshop situation. It explains the methodology to analyze qualitative data from a structured process acted out in a workshop. The structure, using a questionnaire as an agenda, was designed to elicit the experiences and expectations of Value Management (VM) clients in the UK. Privatized infrastructure projects have to demonstrate their financial and technical viability before they are undertaken. Although it is relatively easy to demonstrate the technical viability of an infrastructure project, the evaluation of the financial viability of a privatized infrastructure project is complex and challenging, mainly because of the uncertainties involved due to the project's scale, long concession period and complexity. Traditional methods, such as net present value (NPV) analysis, fall short in reflecting the characteristics of privatized infrastructure projects and the risks involved. This paper presents an option pricing based model, the BOT option valuation (BOT-OV) model, for evaluating the financial viability of a privatized infrastructure project. This quantitative model considers the project characteristics explicitly and evaluates the project from the perspectives of the project promoter and of the government when the project is under bankruptcy risk. Moreover, the model can evaluate the impact of the government guarantee and the developer negotiation option on the project financial viability.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | BOT; privatized; infrastructure; option pricing theory; financial decision-making; investment evaluation |
| Index terms: | infrastructure project, bankruptcy, negotiation, option, value management, financial viability, net present value, concession period, workshop, pricing, promoter, complexity, methodology, decision-making, questionnaire, guarantee, focus group |
| Subjects: | business management, economic analysis, construction type, research methods, data collection methods, infrastructure and transport systems, systems engineering, conflict resolution, sociology, decision analysis, contract structure, management |
| Topics: | Research Practice, Business Strategy, Construction Technology, Stakeholder Management, Value Management, Engineering Principles, Procurement, Risk Management |
| Descriptive scope: | 5 PCTEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here