A simulation model for optimizing the concession period of public–private partnerships schemes

Public–private partnerships (PPP) are becoming an increasingly popular option of project delivery. Under the concession-based PPP arrangement, the private partner is responsible for funding the scheme, while their capital investment will be recovered through the operation revenue over the concession period. Therefore, calculating an appropriate investment return over the concession period becomes a very important aspect that influences success of the PPP project, particularly so as the concessionaire may be tempted to increase their toll/tariff should the revenue fall short of their expected. However, due to the difficulties in estimating the long-term uncertainties and wider-risk profiles at the tendering stage, the government would conduct the traditional net present value and payback period analyses to determine the concession period. In this paper, a simulation model which aims to assist the public partner to determine an optimal concession period is proposed. A hypothetical example is worked through to illustrate the concept of the simulation model. The results show that the risks and uncertainties, such as a change in inflation rate, traffic flow and operation cost, could influence the decision on the concession period. With the help of the simulation model, the impact of risk can be taken into account when establishing an ideal concession period.     

Strategizing for anticipated risks and turbulence in large-scale engineering projects

Large-scale engineering projects face an increasingly turbulent environment, which limits the validity of traditional planning approaches. Using the grounded theorising method, based on 60 project cases, we elaborate a conceptual framework for project strategic systems. Based on the distinction between anticipated but uncertain risks, and unexpected events produced by environmental turbulence, we develop the notions of system robustness and, respectively, governability. By comparing the features and performance of three common types of project, we show that achieving high project performance requires strategic systems that are both robust with respect to anticipated risks and governable in the face of disruptive events.     

A decision support framework for project sponsors in the planning stage of build-operate-transfer (BOT) projects

Every decision-making problem is oriented towards the selection of the correct strategies for achieving objectives, and depends on the assumptions associated with different scenarios. Project planning in a buildoperate-transfer (BOT) project is a complicated decision-making problem because the model has a complex financial and organizational structure which is influenced also by the socio-economic environment in a country. A decision support framework is reported, as used in the planning stage of a hydropower plant project in Turkey, which helped the project company to check project viability against some predefined critical success factors, define the risk sharing scenarios under which a project becomes viable, incorporate risks into cash flow analysis and, finally, define effective risk mitigation strategies. Key challenges in the realization of BOT projects, particularly in developing countries, are discussed together with possible risk sharing principles between the private and public sector participants.     

Selection of government supervision mode of PPP projects during the operation stage

During the operation stage of public-private partnership (PPP) projects, investors may engage in opportunistic behaviour in pursuit of their own profits. In order to curb this kind of behaviour, this article analyses the selection of government supervision mode based on evolutionary game theory taking the perspective of government supervision. The results show that government supervision mode is closely related to the probability of identifying investors’ speculative behaviour through outcome-oriented supervision. When the probability of identifying such behaviour is relatively high, the equilibrium strategy of investors and governmental supervision institutions is (not to behave opportunistically, outcome-oriented supervision). In contrast, if the probability is relatively low, there is no set of evolutionarily stable strategies (ESS); rather, a periodic behavioural pattern is formed. In this scenario, the strategies ultimately chosen by both sides relate to initial states and the payoffs of the options. Furthermore, determinants and some recommendations for government supervision are proposed, providing a reference for efficient governance.     

基于风险的BOT项目特许权期限决策模型

从风险的角度建立了一个BOT项目特许权期限决策模型。通过该模型讨论了项目建设成本、贴现、项目风险等因素对BOT项目特许权期限的影响，并提出了政府在选择特许权期限方面的若干建议。     

浅谈现阶段如何搞好公路工程监理工作

分析了目前的监理管理模式,探讨了混合型监理模式的弊端,剖析了混合型监理模式出现的原因,提出了搞好公路工程监理工作的建议,以更全面地推行工程建设监理制度,提高建筑工程质量.     

浅析山区公路可研阶段路线方案选择

针对建设项目可行性研究的重要性,从资料收集、路线总体方案研究、路线方案研究及环境保护等方面,深入探讨了山区公路可研阶段路线方案的选择,以保证最后推荐的路线方案为最优方案。     

A Multiply Connected Belief Network approach for schedule risk analysis of metropolitan construction projects

Metropolitan construction projects may be distinguished from other types of projects due to their specific nature. Issues with regard to purchase of property obstacles, a lack of accurate layout drawings for some underground facilities and, therefore, following probable changes in designs make it vital to have specific studies on risk analysis of such engineering projects. However, conventional methods offered in literature of risk analysis fail to consider the interactional mechanisms of risks and their simultaneous occurrence. This paper exploits the Multiply Connected Belief Network approach in MATLAB environment to analyse the simultaneous occurrence of risk factors on schedule delay of a highway project. The method of inference is through Junction Tree Algorithm due to existence of multiply connections in the developed network of the project. The findings for schedule delay were tested in a different space using Monte Carlo simulation and had satisfactory results.     

Analysis of the risk-sharing ratio in PPP projects based on government minimum revenue guarantees

Public-private partnership (PPP) projects have been widely applied in infrastructure construction. A suitable risk distribution strategy is crucial for promoting negotiations between the government and investors. The government usually provides guarantees to investors to distribute risk. However, an excessive guarantee increases the government's financial burden, whereas an insufficient guarantee reduces the confidence of the investors participating in the project. In a minimum revenue guarantee (MRG), the government subsidizes the investors the difference between the actual revenue and the government guarantee line if there is a loss. In PPP power plant and highway projects, investors' revenues come from two sources: government guarantees and the project company's self-sale. To support project companies and to optimize the projects' benefits, the government should set a reasonable benchmark for purchase amounts. Based on the traditional principal-agent model, this paper introduces the reciprocal preference theory to analyze the risk-sharing ratio most suitable for the government. Then, an optimal incentive mechanism is established to guarantee the project's income. The results indicate that by setting a different guarantee strategy for different participants, the government can utilize reciprocal preference to incentivize investors to exert more effort during a partnership and avoid moral hazard.     

谈施工方如何做好市政工程竣工结算审核工作

以太原市2008年滨河西路胜利桥立交工程竣工结算审核为例,探讨了作为一名施工方的造价员,做好市政工程竣工结算审核工作的方法,并进行了系统分析,从而为类似工程竣工结算审核提供指导。     

Effects of project governance structures on the management of risks in major infrastructure projects: A comparative analysis

Large infrastructure construction projects are prone to risks. Using desktop review and interviews with stakeholder organizations in two major infrastructure projects (the Yi-wan Railway Construction Project in China and the Northern Gateway Toll Road (NGTR) Project in New Zealand), this study investigated how different project governance structures affect the management of risks. Comparative analysis shows that project governance provides a structured mechanism to identify and address risks as they occur. Despite varied context, two projects relied upon flexible contractual arrangements to leverage risks among project participants. While a centralized, single-agent governance was adopted in the form of Project Management Headquarters (PMH) in Yi-wan Railway project, an alliance governance structure was used in the NGTR project. The former enabled top-down risk allocation whereas the latter encouraged proactive solutions to risk sharing. The research outcomes will inform the decision making among project stakeholders on establishing appropriate project governance arrangements in order to achieve target risk management outcome. By comparing real-time projects of varied scope, complexity and significance, the findings contribute to an improved understanding of the relationship between project organizations and project risk management.     

An investigation of governance frameworks for public projects in Norway and the UK

This paper describes four case studies which formed a key part of an investigation into public investment project governance frameworks in Norway and the UK. The studies looked at how the embedded governance principles worked out in practice, how they affected PM, and how consistent their effects were with their aims. Conclusion is made about the actual effects of the frameworks, and various areas for improvement or further study are highlighted.     

Critical success criteria for mass house building projects in developing countries

Project success is a complex and often illusory construct. Nonetheless, it is crucially contingent towards enabling appropriate and effective allocation of resources in project management practice. Mass house building projects (MHBPs) represent one of the largest and most established project-based sectors of the construction industry in most developing economies. Above all, the management skills required on these projects differ significantly from the one-off projects often encountered in the construction industry. While some success criteria may be common across project types, there is no denying the fact that some determinants of success are likely to be unique to projects of specific characteristics. This research sets out to address what constitutes the determinants of success in MHBPs. A questionnaire survey is used to establish property developers’ perception of critical success criteria in MHBPs in Ghana. Data analysis (involving one-sample t-test) reveals some interesting findings in regard to how property developers perceive the importance of the project success criteria. Factors analysis reveals four underlying clusters named in order of their significance as environmental-impact, customer satisfaction, quality and cost and time. This systematic approach towards understanding the taxonomy of the success dimension in MHBPs is important for re-enforcing effective project management practices in this significant sector of the construction industry.     

浅谈工程竣工结算中造价的控制

介绍了建筑安装工程造价的含义,强调了支付工程进度款要严格按照施工合同中的付款条件、付款方式进行,详细阐述了工程竣工结算时,应严格把好审核关,从而达到在工程竣工结算中合理控制工程造价的目的。     

An innovative approach for generation of a time location plan in road construction projects

Existing linear scheduling methods for earthwork activities lack accurate scheduling locations in road construction projects. Project planners and construction managers largely depend on subjective decisions for the allocation of resources at correct locations. This has caused uncertainties in planning and scheduling, and consequently delays and cost overruns of projects. Accurate information of working locations is vital for efficient resource planning, scheduling and equipment mobilisation. A theoretical framework for a virtual construction prototype model is developed using the theory of location‐based planning and this is used as the basis of sensitivity analysis to identify critical factors affecting road construction. An arithmetic algorithm is developed by incorporating road design data, sectional quantities, variable productivity data, unit cost, site access points and haulage distance. The model generates a time location plan automatically with the aim to provide location‐based scheduling information of earthwork activities. Weekly progress profiles, terrain surfaces, cost profiles and S‐curve are the other outputs of the model. Data and information collected from the case studies are used to demonstrate functionalities of the model. Critical factors controlling the productivity of earthwork activities such as different types of equipment, soil characteristics and site access points were used to display the sensitivity effect by means of ‘what‐if scenarios’. The model is a valuable tool in analysing impacts of different factors associated with productivity data and resource planning from location aspects in the earthwork construction projects.     

Logit model for river levee stability evaluation considering the flood return period

Probabilistic models of the binary logit model for both middle/small and large-scale levees are presented for the evaluation of the stability of river levees. Stability can be expressed as the probability of collapse of a levee as estimated by this logit model. The expectation cost (sum of the damage risk potential plus cost of restoring the levee) is adopted for the comprehensive evaluation of river levees where the application is limited to damage done to the levee itself and excludes damage to human life and property. This method, therefore, can be used to determine appropriate types of improvements. The evaluation is statistical and requires a large amount of data including data about non-damaged levees. To circumvent this, we consider the probability of a flood and its return period and show that a practical probability of levee damage actually occuring must be calculated using a combination of the logit model and the return period.     

公路工程施工期风险评价

结合某高速公路改扩建工程,以施工期为研究对象,初步探讨了公路工程建设项目风险的特点和施工期风险评价的基本方法,为今后更深入的研究奠定了基础。     

Exploring the emergence of lock-in in large-scale projects: A process view

The purpose of this paper is to investigate the emergence of lock-in in large-scale projects. Although large-scale projects have been studied for decades, most studies have applied economic or psychological perspectives to emphasize decision-making processes at the project front-end. Of those studies, some have focused on poor decision-making due to lock-in and the escalating commitments of decision-makers to ineffective courses of action. However, little is known about the way that project decisions are affected by organizational and inter-organizational contexts and the actors involved. Understanding decisions from a process viewpoint with a long-term (inter-) organizational perspective will lead to a better understanding of lock-in and the overall performance of large-scale projects. This qualitative research is based on a case study. The research setting is the multi-actor Madrid–Barcelona High-Speed rail Line (HSL) project in Spain. Through observations, interviews, several project documents, and report analysis, we explore the processual nature of the choices made during the course of the project. We consider the contextual conditions that give rise or support the emergence of lock-in in relation to pre- and post-project effects, institutional influences, and management practices that create action spaces at the project level. Our findings suggest that lock-in emergence requires the recognition of the long-term (inter-) organizational perspective regarding mechanisms and effects rather than confining decisions to the individual or single actor control in the front-end of projects. Based on organizational theory, the main contribution of this paper is to enrich our understanding of the emergence of lock-in using process theories.     

Intervening conditions on the management of project risk: Dealing with uncertainty in information technology projects

A review of the outcome of many information technology (IT) projects reveals that they fail to meet the pre-specified project objectives of scope, time and budget. Despite well-established project risk management processes, project managers perceive their application as ineffective to manage risk. This failure may well be attributed to the inadequate application of those risk management processes. The purpose of this research was to investigate how project managers responsible for the management of risk in IT projects actually managed risk and to relate this back to established project risk management processes. In undertaking this investigation, we were seeking to understand the ways in which the project managers’ approaches and behaviours, when considering risk in IT projects, differed from what might be expected. Results show that because of environment-related and decision maker-related conditions, project managers tend to deny, avoid, ignore and delay dealing with risk, with the consequence of those actions having an adverse influence on their perceived effectiveness of risk management and the project outcomes. If project risk management, and its underlying processes are not to be discredited, the behaviour of project managers when confronted by uncertainty should be considered and actions need to be taken to discourage project managers’ irrational actions.     

Escalation of commitment in troubled IT projects: Influence of project risk factors and self-efficacy on the perception of risk and the commitment to a failing project

Past studies have indicated that project managers may be less likely to continue failing IT projects if they are able to perceive project risks accurately. Using the scenario of a failing IT project, a computer simulation-based experiment investigated the influence of individual self-efficacy and project risk factors on the perception of risk. Participants played the role of a project manager and managed a simulated IT project. The results suggest that project managers are likely to underestimate the risks of a project with endogenous risk factors as compared to a project with exogenous risk factors. Results of this study point to a ‘self-efficacy bias’ where project managers with higher self-efficacy may underestimate the risks of a troubled IT project as compared to project managers with lower self-efficacy. Further, risk perception mediated the influence of self-efficacy on the commitment to a failing IT project.