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1 – 10 of 341Alberto De Marco, Giulio Mangano and Timur Narbaev
The purpose of this paper is to contribute to the understanding of the crucial influence of risks on the capital structure of build-operate-transfer (BOT) projects.
Abstract
Purpose
The purpose of this paper is to contribute to the understanding of the crucial influence of risks on the capital structure of build-operate-transfer (BOT) projects.
Design/methodology/approach
The equity portion of capital injected in a BOT investment is selected as the response variable and its relation with select identified risk factors is examined using a regression analysis on a data set of BOT projects.
Findings
Results have pointed out that the level of equity is significantly influenced by several sources of risk. Country, revenue, project and special purpose vehicle-related risks have been shown to have an impact on the size of the equity share of a BOT investment.
Research limitations/implications
The results could support both investors and lenders to better define the financial leverage of BOT projects. In particular, the study could help to have a better understanding of the main factors that influence the equity apportion of capital in BOT investments.
Originality/value
This paper contributes to fulfilling the lack of works addressing the relationship between risk factors and capital structure in BOT projects. In this way, this research leads to a better understanding of the risk factors that influence the capital structure of BOT project and they have therefore been proposed as a base for the establishment of improved methods to design refined capital structures in BOT projects.
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Akintayo Opawole, Kahilu Kajimo-Shakantu, Oluwaseyi Olalekan Alao and Chinanu Patience Ogbaje
The build-operate-transfer (BOT) model is fast becoming a sustainable tool for remedying the deficiencies of public financing of hostel facilities in Nigeria. Being a new concept…
Abstract
Purpose
The build-operate-transfer (BOT) model is fast becoming a sustainable tool for remedying the deficiencies of public financing of hostel facilities in Nigeria. Being a new concept in Nigeria, this study aims to assess clients’ organizations perspective of risk factors associated with BOT model with a view to providing information for their effective management.
Design/methodology/approach
Quantitative descriptive analysis was used, which was based on primary data obtained through questionnaire survey. The respondents included architects, engineers (structural/civil/mechanical/electrical), builders and quantity surveyors who were officials in the physical planning development and works departments of five sampled universities in the southwestern Nigeria who executed at least one BOT hostel project. A total number of 45 copies of questionnaire were administered, out of which 35 copies representing a response rate of 77.8 per cent were retrieved. Data analysis was undertaken using descriptive statistics: percentages, mean item score and relative importance index.
Findings
Severity of the risk factors specific to BOT model for hostel development was revealed. Besides, conceptual allocations and mitigation measures were suggested against each risk factor.
Practical implications
Private sector investor would find the results of this research useful in preparing robust BOT contract packages through the understanding of the nature of risk factors associated with the procurement model.
Originality/value
With limited evaluation of BOT in hostel facilities procurement, this study developed a simplified approach to management of risk factors associated with BOT model in the education sector.
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Neema Kavishe and Nicholas Chileshe
The purpose of this paper is to identify the critical success factors (CSFs) and key areas for improvement for public–private partnerships (PPP) in affordable housing schemes…
Abstract
Purpose
The purpose of this paper is to identify the critical success factors (CSFs) and key areas for improvement for public–private partnerships (PPP) in affordable housing schemes (AHS) projects, using Tanzania as a case study.
Design/methodology/approach
Semi-structured interviews were conducted with 10 public and private sector practitioners in Tanzania. The collected data and the interview transcripts were analysed using the standard qualitative analysis technique of content analysis.
Findings
The findings show the six most important CSFs as: a dedicated team of professionals to oversee the PPP projects, official and unofficial site visits and inspection, government support and guarantees, undertaking checks and balance from the design stage to construction stage, scrutiny of PPP project proposal and trust and integrity. The mapping of the CSFs across the PPP project lifecycle highlighted a higher incidence across the following phases: building (n = 11), preparation (n = 10) and operational (n = 9).
Practical implications
The identification of these CSFs would support PPP practitioners in successfully implementing PPP in AHS; besides, there is potential for their inclusion in the future development of the affordable housing PPP conceptual framework. Therefore, based on the identified CSFs, both the government and policy makers could use the findings as the basis for re-examining the existing PPP policy and regulations and reflecting on the existing situation with a view to improving the delivery of future PPP projects.
Originality/value
This paper provides the first empirical study by applying direct content analysis to identify and understand the CSFs and key areas for improvement for PPPs in AHS within the Tanzanian housing sector. This is rather an under researched subject around CSFs for PPPs from developing countries such as Tanzania.
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Prasanta K. Dey and Stephen O. Ogunlana
Construction projects are risky. However, the characteristics of the risk highly depend on the type of procurement being adopted for managing the project. A build‐operate‐transfer…
Abstract
Construction projects are risky. However, the characteristics of the risk highly depend on the type of procurement being adopted for managing the project. A build‐operate‐transfer (BOT) project is recognized as one of the most risky project schemes. There are instances of project failure where a BOT scheme was employed. Ineffective rts are increasingly being managed using various risk management tools and techniques. However, application of those tools depends on the nature of the project, organization's policy, project management strategy, risk attitude of the project team members, and availability of the resources. Understanding of the contents and contexts of BOT projects, together with a thorough understanding of risk management tools and techniques, helps select processes of risk management for effective project implementation in a BOT scheme. This paper studies application of risk management tools and techniques in BOT projects through reviews of relevant literatures and develops a model for selecting risk management process for BOT projects. The application to BOT projects is considered from the viewpoints of the major project participants. Discussion is also made with regard to political risks. This study would contribute to the establishment of a framework for systematic risk management in BOT projects.
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Isaac Akomea-Frimpong, Xiaohua Jin and Robert Osei-Kyei
Globally, the management of financial risks has gained much attention in the public–private partnerships (PPP) market in recent years. Existing studies rank financial risks among…
Abstract
Purpose
Globally, the management of financial risks has gained much attention in the public–private partnerships (PPP) market in recent years. Existing studies rank financial risks among the topmost risk factors that determine the success or failure of a PPP project. As essential for managing financial risks, a systematic review of previous studies on financial risk management of PPP from 1995 to 2019 (inclusive of both years) has been presented in this paper.
Design/methodology/approach
The paper undertakes a systematic analysis of 49 relevant and available studies on financial risk management of PPP projects.
Findings
From the results, high-interest charges, increased construction costs and increased market risks are some of the key financial risks hampering the success of PPP projects. Techniques used to assess financial risks include Monte Carlo Simulation (MCS) and Net Present Value (NPV). Financial risks control adopted by project managers include minimum revenue guarantee and real option pricing. Extremely limited studies on financial risk management in PPP projects in developing economies was revealed.
Practical implications
Project managers in developing financial risk management models may use the outcome of this paper to improve the financial success of PPP projects. Holistically, researchers will be guided to investigate and heighten the pertinent issues on financial risk management of PPP projects in academia.
Originality/value
The results provide a rare guide to project managers in controlling financial risks of PPP projects which is an unexplored topic. It is also the first paper to highlight the issues of financial risk management in PPP projects research.
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Alberto De Marco, Giulio Mangano and Xin‐Yu Zou
The purpose of this paper is to determine the fundamental factors influencing the equity share in build‐operate‐transfer (BOT) investments in relation to the project risk profile.
Abstract
Purpose
The purpose of this paper is to determine the fundamental factors influencing the equity share in build‐operate‐transfer (BOT) investments in relation to the project risk profile.
Design/methodology/approach
The relationships between risk factors and equity participation into the capital structure of a BOT contract are examined using regression analysis of a dataset of toll road projects.
Findings
Results suggest that the inflation rate, the size of the investment, the construction period, the solidity of the vehicle company, and the organizational structure of the project are significant variables of the equity portion of financing.
Practical implications
The analysis may support project promoters by providing better understanding of the factors that might facilitate high debt leverages and by providing lending institutions with valuable information to integrate the method of determining the appropriate debt resources to be injected into a BOT project.
Originality/value
The paper contributes towards growing the body of knowledge regarding the way public‐private partnership initiatives are carried over and helps refine the capital structures of BOT projects.
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Ozan Okudan, Cenk Budayan and Irem Dikmen
The purpose of this paper is to develop a new conceptual life cycle performance measurement system (PMS) based on stage level key performance indicators (KPIs) to measure the…
Abstract
Purpose
The purpose of this paper is to develop a new conceptual life cycle performance measurement system (PMS) based on stage level key performance indicators (KPIs) to measure the performance of build–operate–transfer (BOT) projects.
Design/methodology/approach
This study uses a literature review to reveal the deficiencies of existing PMSs for public–private partnership (PPP) projects. Based on these deficiencies, four recommendations were proposed for developing a PMS. The validation of these recommendations was performed via focus group discussion sessions conducted with 12 experts. Then, a conceptual framework was developed based on the validated recommendations and the additional recommendations emerged during focus group discussions. Finally, the recommendations proposed by the focus group were tested by a questionnaire survey, the findings of the Friedman test and descriptive analysis validated these recommendations.
Findings
Findings of the focus group discussion, Friedman test and descriptive analysis indicated that the PMS should have four crucial features to develop an efficient, effective and comprehensible PMS for the BOT project. Firstly, non-financial and financial KPIs should be integrated. Secondly, the PMS should be developed as a process-based system with stage level KPIs. The performance of the BOT projects should be monitored and reviewed continuously, however the most important KPIs should be used for continuous performance measurement to increase the applicability of the system and allocate the resources more efficiently.
Research limitations/implications
This survey was conducted on experts who have experience with BOT projects located in Turkey, therefore, judgments of experts might be affected by external factors specific to Turkey such as geopolitical situations, investment environment. However, due to the nature of BOT projects, the experience of experts can also be utilized at the international level.
Originality/value
This is the first time a PMS has been developed to measure the performance of a BOT project. In addition, this system has unique features when compared with the PMS proposed in the literature. Especially, the stage level KPIs and continuous performance measurement with the most important KPIs throughout each stage has never been used. This research provides both public sector and private entities with an insight into effectively measure, control and manage their BOT infrastructure projects' performances throughout their life cycles.
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Nunzia Carbonara and Roberta Pellegrino
The purpose of this paper is to provide a comprehensive understanding of the Public Private Partnerships (PPP) in Italy in order to highlight challenges and opportunities for a…
Abstract
Purpose
The purpose of this paper is to provide a comprehensive understanding of the Public Private Partnerships (PPP) in Italy in order to highlight challenges and opportunities for a more effective adoption of PPP in Italy. In particular we analyze three key aspects that affect the PPP adoption and implementation, namely the institutional, organizational, and financial ones, and their changes over time.
Design/methodology/approach
To reach the aim, we have conducted an empirical research, gathering qualitative and quantitative relevant information, to characterize three key dimensions affecting the PPP adoption and its effective implementation, namely the institutional, organizational, and financial dimension.
Findings
The analysis of PPP in Italy reveals that, although it is a relatively recent practice, its use is widely spread in delivering public infrastructures. Nevertheless, there are still some shortcomings, related to administrative, financial, and legal issues, that make the application and use of PPP, although considerable in size, less effective and efficient in Italy than in some other countries. In order to overcome these limitations, different interventions are required in order to strength the practices and advance the body of knowledge.
Practical implications
The study formulates useful recommendations for an effective implementation of PPP based on the analysis of the main constraints for the PPP's development in Italy.
Originality/value
The study overcomes the gap of the existing literature on the Italian PPP that have analyzed the phenomenon under two different approaches. Some researchers have investigated the key aspects characterizing PPPs, by adopting a mono-dimensional perspective. Other studies have analyzed the extent of adoption and diffusion of PPP in Italy, by presenting data on PPP projects by sector and/or by types. This paper contributes to fill this gap by providing both a comprehensive analysis of PPP, based on three key dimensions characterizing the PPP adoption and implementation, as well as by presenting an updated picture of the PPP in Italy.
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W.R. ZHANG, S.Q. WANG, R.L.K. TIONG, S.K. TING and D. ASHLEY
The build‐operate‐transfer (BOT) arrangement is becoming one of the prevailing ways for infrastructure development in China to meet the needs of China's future economic growth and…
Abstract
The build‐operate‐transfer (BOT) arrangement is becoming one of the prevailing ways for infrastructure development in China to meet the needs of China's future economic growth and development. Despite tremendous opportunities, the undertaking of infrastructure business in China involves many risks and problems which are mainly caused by China's embryonic legal structure and immature economic market. Further strategies in risk allocation and management are especially important for successful investments in China. Choosing the right path for a BOT project investment is crucial since each project involves different legal rights, different obligations and different risk implications. The present paper describes the structuring and risk allocation, as well as the Government guarantees in a China BOT transport project, the Shanghai Yan'an Donglu Second Tunnel (YD2nd Tunnel). It is also the first BOT project implemented in Shanghai. The project features and the guarantees provided by the Government are described in the present paper.
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