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Barot, B (2002) Growth and business cycles for the Swedish economy. Journal of Construction Research, 3(02), 217–53.

Chan, E H W and Chan, A T S (2002) Development of professional system in the construction industry of China. Journal of Construction Research, 3(02), 271–84.

Devapriya, K A K and Pretorius, F (2002) The economic implication of project finance arrangements for BOO/BOT power projects in Asia. Journal of Construction Research, 3(02), 285–309.

English, J (2002) The communication problems experienced by workforce on site, and their possible solutions. Journal of Construction Research, 3(02), 311–21.

Love, P E D, Tse, R Y C, Holt, G D and Proverbs, D G (2002) Transaction Costs, Learning, and Alliances. Journal of Construction Research, 3(02), 193–207.

Shen, L-Y, Wu, M and Wang, J Y (2002) A model for assessing the feasibility of construction project in contributing to the attainment of sustainable development. Journal of Construction Research, 3(02), 255–69.

Woodhead, R M and Downs, C G (2002) Facilitation as a research method to improve value management capabilities. Journal of Construction Research, 3(02), 209–16.

  • Type: Journal Article
  • Keywords: BOT; privatized; infrastructure; option pricing theory; financial decision-making; investment evaluation
  • ISBN/ISSN: 1609-9451
  • URL: http://www.worldscinet.com/jcr/03/0302/S1609945102000205.html
  • Abstract:
    This paper describes how facilitation, as distinct from focus groups, was used as a research method in a workshop situation. It explains the methodology to analyze qualitative data from a structured process acted out in a workshop. The structure, using a questionnaire as an agenda, was designed to elicit the experiences and expectations of Value Management (VM) clients in the UK. Privatized infrastructure projects have to demonstrate their financial and technical viability before they are undertaken. Although it is relatively easy to demonstrate the technical viability of an infrastructure project, the evaluation of the financial viability of a privatized infrastructure project is complex and challenging, mainly because of the uncertainties involved due to the project's scale, long concession period and complexity. Traditional methods, such as net present value (NPV) analysis, fall short in reflecting the characteristics of privatized infrastructure projects and the risks involved. This paper presents an option pricing based model, the BOT option valuation (BOT-OV) model, for evaluating the financial viability of a privatized infrastructure project. This quantitative model considers the project characteristics explicitly and evaluates the project from the perspectives of the project promoter and of the government when the project is under bankruptcy risk. Moreover, the model can evaluate the impact of the government guarantee and the developer negotiation option on the project financial viability