Songer, A D; Diekmann, J and Pecsok, R S (1997) Risk analysis for revenue dependent infrastructure projects. Construction Management and Economics, 15(4), pp. 377-382. ISSN 01446193
Abstract
Recent trends in the construction industry indicate continued use of alternative procurement methods such as design-build, construction management build-operate-transfer, and privatization. Increased use of these evolving methods produces higher levels of uncertainty with respect to long term performance and profitability. The uncertainties inherent in implementing new procurement methods necessitate investigation of enhanced methods of pre-project planning and analysis. This is particularly true for revenue dependent privatization projects such as toll roads. Poor initial performance of toll road projects suggests traditional methods of project analysis are inadequate. Sustaining investor and stakeholder support of privatized revenue dependent projects is dependent upon successful financial performance. Enhanced risk analysis tools provide improved information for pre-project decision making and performance outcome. One such risk analysis method is the Monte Carlo. Monte Carlo methods are especially useful in evaluating which of several uncertain quantities most significantly contributes to the overall risk of the project. This paper demonstrates a Monte Carlo risk assessment methodology for revenue dependent infrastructure projects.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | computer; Monte Carlo; privatization; project finance; risk analysis |
| Index terms: | revenue, toll, methodology, decision-making, financial performance, risk analysis, project finance, project planning, investor, procurement method, performance outcome, risk assessment, build-operate-transfer, profitability, investigation, construction industry, privatization, infrastructure project, road project |
| Subjects: | economic analysis, contractual arrangements, data collection methods, value management, control systems, sociology, decision analysis, environmental hazards, transportation engineering, infrastructure and transport systems, industry analysis, research methods, business analysis, financial management, financial risk, infrastructure engineering |
| Topics: | Sustainability, Procurement, Stakeholder Management, Risk Management, Engineering Principles, Project Management, Research Practice, Business Strategy, Cost Management |
| Descriptive scope: | 4 PCTA |
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