Modelling financial decisions in construction firms

Some contractors predict their corporate cash flow on the basis of individual contracts without considering the relationships between the overall before-tax profit, risks, other crucial qualitative factors, or the allocation of resources within the company. Moreover, some contractors, in predicting their cash flow, focus only on the early-start progress in the project and their predictions of progress are too pessimistic, or result in the overuse of resource in order to make up for delays. In the present research a decision model is established for a contracting firm. It provides a methodical system for construction financial decision-making, and a way of solving a financial decision problem under qualitative and fuzzy circumstances. The model can be applied to the management of corporate cash flow, thereby facilitating the minimal use of resources. The information provided by the model allows the planner to eliminate excess use or idleness of resources during the scheduling of a project. Financial forecasting may also suggest the best time to invest in a new project. Four projects for a medium size construction firm in Hong Kong were employed as case studies in order to evaluate the mathematical model. The cases involve two objectives: maximize profit margin and minimize construction risk (consider in a qualitative factor). The model leads to a compromise optimal schedule that provides the contracting firm with the optimal schedule for achieving optimal profit and construction risk by making optimal use of the contractor's resources.     

普通高等学校基建项目 BLT 模式研究

为解决普通高等学校基建项目存在的融资可持续发展问题,通过对普通高等学校教育经费构成和融资现状的分析,并综合考虑普通高等学校可行的融资方式和学校基础设施建设过程中的任务分配情况,构建了基于决策树分析法的普通高等学校基建项目开发模式。经过方案论证,重点考虑将 BLT 模式引入普通高等学校基础设施建设和开发中,并详细分析了其运作流程和主要风险。应用该模式是普通高等学校基建项目融资方式的创新,有利于缓解普通高等学校基建项目的资金压力并提高项目管理效率。     

The fuzzy GA-based multi-objective financial decision support model for Chinese state-owned construction firms

An ideal multi-objective financial decision support (MFDS) model for contractors should have ability of handling both the quantitative and qualitative inputs. This paper aims to develop a new MFDS model, which attempts to provide a more accurate way to support financial decision-makers in Chinese state-owned construction firms. Owing to the slow progress of passing the construction regulations, coupled with the inherited ownership problems in the Chinese booming construction industry, it is logical for Chinese project managers to make financial decisions with the consideration of the four objective functions (profit margin, risk factors, government relationship and market share), which are realistic representations of the present situation of Chinese construction industry. The proposed MFDS model is a practical method to support financial decision-making. For the model's computational performance, Module 3 (stochastic universal sampling selection, adaptive crossover and adaptive mutation of Genetic Algorithm) is more superior.     

Strengthening housing finance in emerging markets: the savings and credit cooperative organisation (SACCO) model in Kenya

Abstract

Savings have long been an essential source of funding for credit. Whether in Europe, North America, Africa, Asia or Latin America, community-based financial institutions have relied on deposits to make financial services accessible to moderate-income borrowers. Despite the foundational role savings and loans have had in financial sector development, emerging markets have largely overlooked the important role these institutions can have in providing shelter credit in their own contexts. Savings and Credit Cooperative Organisations (SACCOs) in the Republic of Kenya illustrate the potential model for deposit-based lending to deliver housing finance for many of the country’s underserved prospective borrowers. This study draws upon the experiences of several savings and loan associations in the industrialized world with applications towards improving the Kenyan SACCO model that provides the most extensive credit union loans on the African continent. The article concludes community finance institutions merit strong consideration towards helping overcome the housing finance sector underdevelopment too often experienced in the developing world.     

政策性资金与城市水业改革

分析了在我国水业基础设施建设领域政策性资金所发挥的作用,同时提出了在水业建设与运营管理体制变化的情况下政策性资金所面临的挑战.认为开放式金融协议可成为使用政策性资金的有效形式.分析了政策性资金支持市场化项目的操作模式.最后指出了政策性资金应提供更为有效的附加值服务以提高投资效率,国家开发银行可以发挥政策性资金与市场化机制相衔接的主导作用.     

Allocation of post-disaster reconstruction financing to housing

The allocation of a significant portion of post-natural disaster financing to housing reconstruction in poorer countries is examined. Many poorer countries are reliant on external assistance in the form of loans or grants to meet their post-disaster reconstruction needs. Today, half of all the post-disaster borrowing provided by the World Bank is earmarked for the reconstruction of housing. Should this high proportion of limited reconstruction funds be allocated to a fundamentally private sector need? Is such an allocation economically efficient? After exploring these questions, an alternative solution is examined for government funds to be allocated to high economic return projects (e.g. infrastructure) and to meeting the needs of the poor. The allocation of funding to housing, much of which is captured by the economic and social elite, seems a misallocation of scarce resources. This is particularly the case since the funding available for post-disaster reconstruction by the international financial institutions is constrained and unable to meet anticipated future demand.     

基于 SEM 的建设项目造价控制影响因素研究

在城市化推进过程中,我国建筑产业逐渐形成以建设项目工程造价为主的市场竞争点。但在工程项目建设活动中,就造价成本而言,容易出现预算与决算相差过大、成本控制难、投资失控等问题。基于文献研究,构建了建设过程、材机选取、造价依据、项目管理、组织管理及财务管理对建设项目造价控制构成影响的假设模型,将问卷调研数据代入结构方程模型实证分析建设项目造价控制的关键影响因素。研究发现,建设项目造价控制受建设过程的直接影响,以及材机选取、造价依据、项目管理、组织管理及财务管理的直接和间接影响,影响程度由大到小依次为建设过程、项目管理、材机选取、组织管理、造价依据、财务管理。该研究结果对建设项目成本造价的控制和管理具有一定的应用价值。     

Loan‐to‐value ratios in Sweden. The impact of financial deregulation

We ask how financial deregulation in Sweden during the 1980s affected housing finance by studying data on loan‐to‐value (LTV) ratios for home owners who moved recently. Accounting for the impact of demographic and economic determinants we find that LTV ratios were higher between 1985 and 1987 than in earlier and later years. This time pattern suggests that the deregulation of the mortgage institutions and the removal of the loan rate ceiling on banks in 1983 and 1984 were more important than abolishment of the bank loan ceiling in late 1985. They also indicate a decrease in loan demand and/or supply as early as 1988, i.e., well before the banking crisis.     

A Grey System Theory‐Based Default Prediction Model for Construction Firms

As the prediction of construction firm failure is of great importance for owners, contractors, investors, banks, insurance firms, and creditors, previous studies have developed several models for predicting the probability of construction firm default based on financial ratio analysis. However, to be applied, these models require a considerable quantity of data, including normally distributed data, and the models cannot tolerate too many changing factors. Furthermore, most of the approaches produce sample selection biases. To avoid these disadvantages, this study is the first to integrate the grey system theory with all available firm‐year samples during the sample period to provide a new method for predicting the probability of construction firm default. This method not only offers an improved rate of prediction accuracy, but it also offers simpler and clearer procedures as a reference for examining firm default probability and ranks all financial ratios in terms of their level of importance. The research collects and analyzes the financial reports of 92 construction firms in the United States. The proposed model includes only eight ranked variables (financial ratios), and it achieves an 84.8% level of accuracy for predicting construction firm default probability. As a result, practitioners may directly use the model as a means of quickly and conveniently examining their firm default probability with the simple procedures.     

政府投资项目融资模式探索与应用——北京奥运会融资模式启示

北京奥运会建设项目采取了形式多样、灵活的融资方式,如BOT、PPP、TOT等模式,将市场竞争机制引入公共建设领域,对于财政性资金投资的政府工程项目的融资有着积极的促进作用.根据北京奥运会项目的融资经验,我们可将市场机制运用到投资、融资、退出、建设、运营、管理等各个环节,在利用多种融资手段保证工程建设的进程的同时,减小政府的负担和财政压力.     

基于短期循环信贷模式的建筑施工企业融资租赁研究

建筑企业融资租赁可以在很大程度上缓解资金流问题,但是简单的融资租赁由于时间耗用较长,会产生较多的利息,而利用短期循环贷款模式进行融资租赁就能较好地解决这个问题.     

Enhanced heuristic for finance-based scheduling of construction projects

Typically, construction contractors operate under cash-constrained operating conditions. The lag between the time when contractors spend money to accomplish work on site and the time when payments are actually made by clients, which partially compensate contractors for the accomplished work, constantly creates a finance deficit. Contractors often supplement finance deficits using external funds procured through establishing credit-line bank accounts which typically allow contractors to withdraw cash up to specified credit limits. This makes the task of project scheduling considering the constraints of specified finance very important for financial and operational planning. This scheduling concept and technique are referred to as finance-based scheduling. An enhanced heuristic is proposed to devise finance-based schedules of multiple projects within contractors’ portfolios. The enhancement is achieved by replacing the exhaustive enumeration technique employed in the heuristic to specify activities’ start times with a polynomial shifting algorithm. This enhancement resulted in a substantial reduction in the number of solutions explored before a feasible solution is encountered. The enhanced heuristic was validated through comparison with the integer programming technique using 240 problems of randomly generated networks of sizes that range from 30 to 240 activities. Further, it was proved that the enhanced heuristic can be easily scaled up to handle portfolios of multiple large-size projects.     

主成份分析法与工程投标决策

工程投标是一项需要消耗人力、物力、财力和时间的工作 ,施工企业若不加选择的对多个工程进行投标 ,一旦不能中标 ,势必造成企业人、财、物的浪费 .笔者对工程投标的多参数决策问题进行了理论研究 ,并建立了相应的决策模型 .     

商业银行房地产项目放贷初始决策研究

信贷业务是商业银行利润的主要来源,也是银行管理和决策中最复杂、最困难的金融业务之一,具备一个良好贷款资产结构和拥有大量较强盈利能力贷款资产是商业银行核心竞争力的重要体现之一。文章从银行视角出发,对房地产项目的放贷问题进行投资分析,由于该决策具有刚性,故传统投资分析方法足够对其评价;对某房地产新项目实例进行计算分析,采用以资本资产定价模型为基础的适用新模型确定折现率,取得了较好的效果,具有一定的现实应用意义。     

Desirability rating analysis for debt financing of public–private partnership road projects

Public–private partnership (PPP) road projects are highly leveraged capital‐intensive projects. Lenders, which provide the major portion of financing in the form of debt instruments, undertake loan approval processes to examine the various aspects of the projects that could influence the debt servicing capability while making credit decisions. In view of this, project sponsors could also assess beforehand how desirable is the project from the debt financing perspective in order to facilitate timely arrangement of debt financing and avoid funding problems. The Desirability Rating Analytical Tool (DRAT) has been developed in order to enable the project sponsor to assess how desirable the project is from a debt financing perspective. DRAT uses the aggregation operator Choquet fuzzy integral to aggregate the information relating to the various aspects of PPP road projects that lenders take into account while making credit decisions. The application of DRAT is illustrated with an example of a PPP road project from a National Highways Development Programme undertaken by the National Highway Authority of India, Government of India. DRAT expressed the result of the information aggregation in the form of a desirability rating profile indicating the degrees of membership to different levels of desirability. The desirability rating profiles of the project provide valuable information for decision making and can help in formulating strategies on improving the performance of the project where it is not performing satisfactorily.     

政府对于PPP模式下市政基础设施建设成本控制的探讨

近年来,我国大力推广和发展PPP模式.PPP模式有效缓解了财政压力,合理配置了工程资源,大大推动了市政基础设施建设的发展.但该模式下的市政基础设施建设多属于非经营性或准经营性项目,社会资本用于工程建设的资金,最终也将由政府财政进行承担,而政府对于工程成本的控制较为困难,现阶段还存在很多问题.本文从项目方案设计及设计变更...     

A neural network bid/no bid model: the case for contractors in Syria

Despite the crucial importance of the ‘bid/no bid’ decision in the construction industry, it has been given little attention by researchers. This paper describes the development and testing of a novel bid/no bid model using the artificial neural network (ANN) technique. A back‐propagation network consisting of an input buffer with 18 input nodes, two hidden layers and one output node was developed. This model is based on the findings of a formal questionnaire through which key factors that affect the ‘bid/no bid’ decision were identified and ranked according to their importance to contractors operating in Syria. Data on 157 real‐life bidding situations in Syria were used in training. The model was tested on another 20 new projects. The model wrongly predicted the actual bid/no bid decision only in two projects (10%) of the test sample. This demonstrates a high accuracy of the proposed model and the viability of neural network as a powerful tool for modelling the bid/no bid decision‐making process. The model offers a simple and easy‐to‐use tool to help contractors consider the most influential bidding variables and to improve the consistency of the bid/no bid decision‐making process. Although the model is based on data from the Syrian construction industry, the methodology would suggest a much broader geographical applicability of the ANN technique on bid/no bid decisions.     

Organisation, ‘anchoring’ of knowledge,and innovative activity in construction

The construction industry is characterised by the widespread use of project organisation. It has been suggested that the relatively low level of innovative activity in the industry can be explained by the temporary nature of firm boundary‐crossing projects. Survey data from the Danish construction industry is used to investigate the importance of learning and ‘anchoring’ of project‐specific knowledge at the firm level for participation in innovative activities. The data cover both the overall Danish construction industry and a specific region, North Jutland, which has a relatively high specialisation of construction workers. Latent class and regression analyses reveal that firms that make extensive use of partnering, together with internal product and process evaluation and knowledge diffusion (labelled ‘knowledge‐anchoring mechanisms’), are more likely to participate in innovative activities than firms which make less use of these mechanisms. This indicates that construction firms are able to compensate for the problems that temporary interorganisational projects may cause in relation to continuous learning at the firm level.     

项目融资租赁与BOT的区别及应用条件分析

项目融资租赁和BOT同属项目融资的范畴,是我国从国外引进的利用外资和民间资本的新型融资方式;而投资界对于项目融资租赁的认识不足,严重制约了这种融资方式的推广。BOT模式引入时间比较长,应用广泛,本文通过对项目融资租赁与BOT模式区别的分析,加深投资界的认识,并就项目融资租赁的应用条件进行探讨。     

A taxonomy for construction terms in privatized‐infrastructure finance: supporting semantic exchange of project risk information

There is an increasing need for effective flow of information between the various participants in privatized infrastructure projects particularly between construction companies and financial institutions. A taxonomy is developed for relevant concepts in the domain of privatized‐infrastructure finance. The taxonomy is an attempt to create information interoperability between the construction and financial industries. The taxonomy models the concepts of a privatized‐infrastructure finance into six main domains: processes, products, projects, actors, resources and technical topics (technical details and basic concepts). The taxonomy was designed to be consistent with Open Financial Exchange (OFX). It was developed through the analysis of 10 case studies and involvement in project development and interaction with industry experts. The taxonomy was validated through interviews with domain experts, and through the analysis of two independent case studies. A prototypical semantic web‐based portal for communicating project risks was developed to in order to illustrate the use of the taxonomy. Project partners are able to post and view risk items and their status in this portal, observe who is handling them, be aware of what decisions have been made to manage them and what lessons learned are available to address these risks.