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Public-Private Partnership (P3)

  • Create novel Real Options Analysis (ROA) models to evaluate investments in P3 projects

    • Price minimum revenue guarantees (MRGs) and Toll Revenue Caps (TRCs)

    • Determine optimal timing for multi-stage infrastructure development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References:

Ashuri, B., Kashani, H, Molenaar, K.R., Lee, S. and Lu, J. (2012). “A Risk-neutral Pricing Approach for Evaluating BOT Highway Projects with Government Minimum Revenue Guarantee Options.” ASCE Journal of Construction Engineering and Management, 138(4), 545-557.

Ashuri, B., Lu, J., and Kashani, H. (2011). “A Real Options Framework to Evaluate Investments in Toll Road Projects Delivered under the Two-Phase Development Strategy.” Built Environment Project and Asset Management, 1(1), 14-31

(Highly Commended Award Winner at the Emerald Literati Network Awards for Excellence 2012).

 

  1. MRG limits the down-side risk and hence, shifts the risk profile to the right.

  2. TRC limits the opportunity of excessive revenue and therefore, shifts the risk profile to the left.

Case Study: Incheon International Airport Highway, South Korea

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