Damnjanovic, I; Duthie, J and Waller, S T (2008) Valuation of strategic network flexibility in development of toll road projects. Construction Management and Economics, 26(9), pp. 979-990. ISSN 1466433X
Abstract
A reliable, cost-effective and safe transportation system is essential to economic growth. To keep pace with demands for network capacity, revenue-generating projects are increasingly being used to complement the current procurement practices and lessen the pressure on public finances. In such transportation networks where there exists a mix of free access links and links with user fees, network interconnectivity is an important component of project valuation. A bilevel stochastic recourse model for valuating network flexibility is formulated. A key component of the model is consideration of network-based managerial flexibility in context of the upper level project valuation objective and the lower level network user equilibrium solution under demand uncertainty. The results from a test network, for which a closed form solution is possible, indicate that the value of network flexibility directly depends on initial network conditions, variance in future travel demand and toll pricing decisions.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | infrastructure planning; network analysis; real options; tolls |
| Index terms: | network analysis, variance, pricing, infrastructure planning, economic growth, real option, road project, revenue, toll |
| Subjects: | transportation engineering, measurement and scaling, infrastructure engineering, economic development, data analysis and analytics, economic analysis, strategic project management |
| Topics: | Sustainability, Business Strategy, Research Practice, Project Management, Engineering Principles |
| Descriptive scope: | 3 PCA |
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