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Back, W E and Bell, L C (1995) Quantifying Process Benefits of Electronic Data Management Technologies. Journal of Construction Engineering and Management, 121(04), 415–21.
Barras, G C and Mayo, R E (1995) Minidirectional Drilling for Installation of Underground Electrical Conduit. Journal of Construction Engineering and Management, 121(04), 364–9.
Beliveau, Y J, Williams, J M, King, M G and Niles, A R (1995) Real-Time Position Measurement Integrated with CAD: Technologies and Their Protocols. Journal of Construction Engineering and Management, 121(04), 346–54.
Dias, A and Ioannou, P G (1995) Debt Capacity and Optimal Capital Structure for Privately Financed Infrastructure Projects. Journal of Construction Engineering and Management, 121(04), 404–14.
- Type: Journal Article
- Keywords:
- ISBN/ISSN: 0733-9364
- URL: https://doi.org/10.1061/(ASCE)0733-9364(1995)121:4(404)
- Abstract:
Concession agreements can be used by governments to induce the private sector to develop and operate many types of infrastructure projects. Under this type of arrangement, several private-sector companies join forces, become project promoters, and form a separate company that becomes responsible for financing, building, and operating the facility. Before this company can be formed, prospective promoters must determine how to fund the associated construction and startup costs. They must decide how much to borrow, how much to infuse from their own funds, and how much to raise from outside investors. Typically, such projects must repay any debt obligations through their own net operating income, and do not provide the lenders with any other collateral (off-balance-sheet financing). Thus, the possibility of a costly bankruptcy becomes much more likely. In this paper, we show that under these circumstances the amount of debt that a project can accommodate (its debt capacity) is less than 100% debt financing. The amount of debt that maximizes the investors' return on equity is less than the project's debt capacity, and the amount of debt that maximizes the project's net present value is even smaller. Exceeding these debt amounts and moving towards debt capacity should be avoided because it can rapidly erode the project's value to the investors. An example illustrates these concepts.
Diekmann, J E and Girard, M J (1995) Are Contract Disputes Predictable?. Journal of Construction Engineering and Management, 121(04), 355–63.
Elzarka, H M and Bell, L C (1995) Object-Oriented Methodology for Materials-Management Systems. Journal of Construction Engineering and Management, 121(04), 438–45.
Hanlon, E J and Sanvido, V E (1995) Constructability Information Classification Scheme. Journal of Construction Engineering and Management, 121(04), 337–45.
Herbsman, Z J (1995) A+B Bidding Method—Hidden Success Story for Highway Construction. Journal of Construction Engineering and Management, 121(04), 430–7.
Hinze, J, Bren, D C and Piepho, N (1995) Experience Modification Rating As Measure of Safety Performance. Journal of Construction Engineering and Management, 121(04), 455–8.
Jeljeli, M N and Russell, J S (1995) Coping with Uncertainty in Environmental Construction: Decision-Analysis Approach. Journal of Construction Engineering and Management, 121(04), 370–80.
Kangari, R (1995) Risk Management Perceptions and Trends of U.S. Construction. Journal of Construction Engineering and Management, 121(04), 422–9.
Kim, J and Ibbs, C W (1995) Work-Package–Process Model for Piping Construction. Journal of Construction Engineering and Management, 121(04), 381–7.
Liu, L, Burns, S A and Feng, C (1995) Construction Time-Cost Trade-Off Analysis Using LP/IP Hybrid Method. Journal of Construction Engineering and Management, 121(04), 446–54.
Riley, D R and Sanvido, V E (1995) Patterns of Construction-Space Use in Multistory Buildings. Journal of Construction Engineering and Management, 121(04), 464–73.
Senior, B A (1995) Late-Time Computation for Task Chains Using Discrete-Event Simulation. Journal of Construction Engineering and Management, 121(04), 397–403.
Smith, S D, Osborne, J R and Forde, M C (1995) Analysis of Earth-Moving Systems Using Discrete-Event Simulation. Journal of Construction Engineering and Management, 121(04), 388–96.
Thomas, H R, Smith, G R and Cummings, D J (1995) Enforcement of Liquidated Damages. Journal of Construction Engineering and Management, 121(04), 459–63.