Pricing of build-operate-transfer and public-private partnership projects under risk

Subject Areas : Financial Knowledge of Securities Analysis

Adel Hambashi ¹ ( Masters’ student in Industrial Management, Department of Industrial and Technology Management, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran. )
Ahmad Ebrahimi ² ( Assistant Professor at the Department of Industrial and Technology Management, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran. (corresponding Author) )
Roya Soltani ³ ( Assistant Professor at Department of Industrial Engineering, Faculty of Engineering, Khatam University, Tehran, Iran )

Received: 2022-07-16 Accepted : 2022-07-16 Published : 2022-05-22

Keywords: Public-private partnership, BOT projects, project portfolio selection, risk control,

Abstract :

Successful implementation of appropriate portfolio of related projects with taking advantage of private company capabilities, is one of the progress indicators in each country. Build - Operate - Transfer contracts as a branch of Public - Private Partnerships are also one of the popular tools to respond to government fund deficiencies in infrastructure projects. In this paper, the whole investment process is set based on self-financing. For selection and time schedule favorite of the project portfolio, a two - way mathematical model with sustainability goals by considering risk, resource constraint, optimal project, interdependence among projects and the flexible time horizon strategy is presented. Also, the main contribution of this paper is considered on maximizing the social benefits of stakeholders. To solve the model, the epsilon constraint method in small and medium size and metaheuristic method of multi - objective genetic algorithm in large size is used. Finally, the main project decision makers determine the cost of the project by selecting the optimal value.

References:

• Attarzadeh, M., Chua, K. D., Beer, M., & Abbott, E. L. (2017). Options-based negotiation management of PPP–BOT infrastructure projects. Construction management and economics, 35, 676-692.


• Galvao, G., Homrich, A. S., & Abadia, L. G. (2018). The circular economy umbrella: Trends and gaps on integrating pathways. Journal of Cleaner Production, 525-543.


• Ghasemzadeh, F., Archer, N., & Iyogun, P. (1999). A zero-one model for project portfolio selection and scheduling. Oper. Res. Soc. 50(7) , 745-755.


• Huang, C.-Y., & Dzeng, R.-J. (2019). Evaluating ancillary business scale for PPP-BOT projects: A social housing BOT case in Taiwan. Sustainability, 11(5), 1415.


• Jafarzadeh, M. (2015). Optimal selection of project portfolios using reinvestment strategy within a flexible time horizon. , Eur. J. Oper. Res. 243(2), 658-664.


• Khanzadi, M., & Khazaeni, G. (1996). Guidelines for infrastructure development through Build-Operate- Transfer(BOT) projects.


• Le, P. T., Chileshe, N., & Kirytopoulos, K. &. (2020). Investigating the significance of risks in BOT transportation projects in Vietnam. . Engineering, Construction and Architectural Management.


• Liu, Y.-J. Z.-G. (2018). Flexible time horizon project portfolio optimization with consumption and risk control. Applied Soft Computing Journal.


• Lu, J., Gao, R., Cheah, C., & Lu, J. (2017). Evolutionary game of investor's opportunistic behavior during the operational period in PPP projects. Construction Management and Economics35(3), 1-17.


• Soomro, M., Soomro, S., & Memon, A. (2016). Process and limitations of value for money analysis tests for infrastructure public-private partnerships. International journal of emerging technology and innovative engineering, 2, 380-386.


• Tavakoli, N., & Nourzad, S. H. (2019). Win-win pricing method for BOT projects using a simulation-based evolutionary optimization. Construction Management & Economics.


• Xing, H. L. (2020). Renegotiation Strategy of Public-Private Partnership Projects with Asymmetric Information—An Evolutionary Game Approach. Sustainability, 12(7), 2646. An Evolutionary Game Approach. Sustainability, 12(7), 2646.


• Zhang, X., Bao, H., Skitmore, M., & Wang, H. (2016). A model for determining the optimal project life span and concession period of BOT projects. International of Project Management, Vo.34(3), 523-532.


• خزائنی, گ. (1398). راهنمای پیکره دانش مشارکت عمومی خصوصی. تهران: فدک ایساتیس.


• شیروی, ع. (1394). قراردادهای بی او تی. تنظیم، ساختار و قوانین حاکم. تهران: نشر میزان.


• محمدبیگی, م. (1391). ارائه مدل مفهومی تخصیص ریسک در پروژه‏های BOT بر اساس استاندارد PMBOK پایان نامه کارشناسی ارشد رشته مهندسی سیستم های اقتصادی و اجتماعی. دانشکده فنی مهندسی، دانشگاه تربیت مدرس.