Real option application in PPP/PFI project negotiation

Construction Management and Economics

Volumn 27, Issue 4, 2009, Pages 331-342

  Liu, Jicai ^a   Cheah, Charles Y J ^b  

^a SOUTHWEST JIAOTONG UNIVERSITY   (China)

^b NANYANG TECHNOLOGICAL UNIVERSITY   (Singapore)

Author keywords

Concession; Negotiation; Private finance initiative; Public private partnerships; Real option

Indexed keywords

CONCESSION; NEGOTIATION; PRIVATE FINANCE INITIATIVE; PUBLIC-PRIVATE PARTNERSHIPS; REAL OPTION;

DEVELOPING COUNTRIES; FLOW SIMULATION; MONTE CARLO METHODS; WASTEWATER; WASTEWATER RECLAMATION; WASTEWATER TREATMENT; WATER TREATMENT PLANTS;

RISK PERCEPTION;

BARGAINING; FINANCIAL PROVISION; MONTE CARLO ANALYSIS; NEGOTIATION PROCESS; PRIVATE SECTOR; PROJECT ASSESSMENT; PROJECT MANAGEMENT; PUBLIC-PRIVATE PARTNERSHIP; RISK ASSESSMENT; WASTEWATER; WATER TREATMENT;

ASIA; CHINA; EURASIA; FAR EAST;

EID: 67650287686     PISSN: 01446193     EISSN: 1466433X     Source Type: Journal    
DOI: 10.1080/01446190902807071     Document Type: Article

References (23)

1. Amram, M. and Kulatilaka, N. (1999) Real Options: Managing Strategic Investment in an Uncertain World, Harvard Business School Press, Boston, MA
2. Black, F. and Scholes, M. S. (1973) The pricing of options and corporate liabilities. Journal of Political Economy, 81:3, pp. 637-659.
3. Charoenpornpattana, S., Minato, T. and Nakahama, S. (2003) Government supports as real options in built-operate-transfer highways projects.
4. Cheah, C. Y. J. (2004) Public-private partnerships in infrastructure development: On value, risk and negotiation.
5. Cheah, C. Y. J. and Liu, J. (2006) Valuing governmental support in infrastructure projects as real options using Monte Carlo simulation. Construction Management and Economics, 24, pp. 545-554.
6. Copeland, T. E. and Antikarov, V. (2001) Real Options: A Practitioner's Guide, Texere LLC, New York
7. Fishbein, G. and Babbar, S. (1996) Private financing of toll roads.
8. Ford, D. N., Lander, D. M. and Voyer, J. J. (2002) A real option approach to valuing strategic flexibility in uncertain construction projects. Construction Management and Economics, 20:4, pp. 343-351.
9. Garvin, M. J. and Cheah, C. Y. J. (2004) Valuation techniques for infrastructure investment decisions. Construction Management and Economics, 22:4, pp. 373-383.
10. Ho, S. and Liang, Y. (2002) An option pricing-based model for evaluating the financial viability of privatized infrastructure projects. Construction Management and Economics, 20:2, pp. 143-156.
11. Irwin, T., Klein, M., Perry, G. E. and Thobani, M. (1997) Dealing with Public Risk in Private Infrastructure: An Overview, World Bank, Washington, DC
12. Klein, M. (1997) Managing guarantee programs in support of infrastructure investment policy.
13. Leviakangas, P. and Lahesmaa, J. (2002) Profitability evaluation of intelligent transport system investments. Journal of Transportation Engineering, 128:3, pp. 276-286.
14. Mehta, A. (2000) Power Play: A Study of the Enron Project, Orient Longman, Mumbai, India
15. Merton, R. C. (1973) Theory of rational option pricing. Bell Journal of Economics and Management Science, 4, pp. 141-183.
16. Miller, J. B. (2000) Principles of Public and Private Infrastructure Delivery, Kluwer Academic Publishers, Norwell, MA
17. Myers S. C. (1987) Finance theory and financial strategy. Midland Corporate Finance Journal, 5:1, pp. 6-13.
18. Palepu, H. G. and Rangan, V. K. (1996) Enron Development Corporation: the Dabhol Power Project in Maharashtra, India.
19. Trigeorgis, L. (1999) Real Options: Managerial Flexibility and Strategy in Resource Allocation, The MIT Press, Cambridge, MA
20. Trigeorgis, L. and Mason, S. P. (1987) Valuing managerial flexibility. Midland Corporate Finance Journal, 5:1, pp. 14-21.
21. Wibowo, A. (2004) Valuing guarantees in a BOT infrastructure project. Engineering, Construction and Architectural Management, 11:6, pp. 395-403.
22. World Bank (2003) Private participation in infrastructure: Trends in developing countries in 1990-2001. Private Provision of Public Services Group, World Bank, Washington, DC
23. Ye, S. and Tiong, R. K. L. (2000) Government support and risk-return trade-off in China's BOT power projects. Engineering, Construction and Architectural Management, 7, pp. 412-422.