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Article
Publication date: 4 July 2019

Shijing Liu, Hongyu Jin, Chunlu Liu, Benzheng Xie and Anthony Mills

Targeting public–private partnership (PPP) rental retirement villages, the purpose of this paper is to bring forward the solution of insufficient research in a…

Abstract

Purpose

Targeting public–private partnership (PPP) rental retirement villages, the purpose of this paper is to bring forward the solution of insufficient research in a non-competitive guarantee (a restrictive agreement) towards the compensation and guarantee costs in consideration of benefit redistribution if the governments are unable to keep the promise on guarantee provision.

Design/methodology/approach

Real option principles are applied to assess the public–private investment proportions and the expected return rates of the private sector in a non-competitive guarantee and analyse their effects on the public–private benefit and risk allocations as well as the success of the project. Instead of granting direct capital support, this research accomplishes the compensation of non-competition guarantee by adjusting the project benefit distribution ratios between the government and the private sector to achieve the option value of the guarantee. An empirical example with alternative scales, which is developed from an existing rental village in Geelong, is used to numerically verify the research process.

Findings

The results illustrate that the option value of the non-competition guarantee plays an important role in supporting the implementation of the PPP rental retirement village projects. The option value of the non-competition guarantee has a close relationship with the guarantee level and the government guarantee cost, which is positively correlated with the guarantee level and negatively correlated with the government guarantee cost. To reduce the government guarantee cost, the government should carefully determine the public–private investment proportion, appropriately control the return rate of the private sector and approve the construction of the new project after the investment recovery of the private sector.

Research limitations/implications

This research mainly focusses on the economic loss of the government due to the guarantee responsibility. Further research could be conducted to determine the guarantee level more precisely and take the social cost of the government guarantees into consideration.

Originality/value

This research is the first attempt to investigate the government compensation and costs of non-competition guarantee for PPP rental retirement village projects and will enhance the understanding of the nature of PPP applications. The evaluation process and the implementation of the compensation through the adjustment of benefit distribution provides a comprehensive method to analyse the non-competition guarantee of PPP projects and help the parties negotiate in good faith to agree on a method of redress.

Details

Engineering, Construction and Architectural Management, vol. 27 no. 1
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 17 July 2017

Xiancun Hu and Chunlu Liu

The purpose of this paper is to present an approach for productivity measurement that considers both construction growth and carbon reduction.

Abstract

Purpose

The purpose of this paper is to present an approach for productivity measurement that considers both construction growth and carbon reduction.

Design/methodology/approach

The approach applied is a sequential Malmquist-Luenberger productivity analysis based on a directional distance function and sequential benchmark technology using the data envelopment analysis (DEA) technique. The sequential Malmquist-Luenberger productivity change index is decomposed into pure technical efficiency, scale efficiency, and technological change indices, in order to investigate the driving forces for productivity change.

Findings

The construction industries of the Australian states and territories were selected implement the new approach. The results indicate that construction growth and carbon reduction can be achieved simultaneously through the learning of techniques from benchmarks.

Practical implications

Current research on total factor productivity (TFP) in construction generally neglects carbon emissions. This does not accurately depict the nature of construction and therefore yields biased estimation results. TFP measurement should consider carbon reduction, which is beneficial for policymakers to promote sustainable productivity development in the construction industry.

Originality/value

The approach developed here is generic and enhances productivity and DEA research levels in construction. This research can be used to formulate policies for evaluating performance in worldwide construction projects, organizations and industries by considering undesirable outputs and desirable outputs simultaneously, and for promoting sustainable development in construction by identifying competitiveness factors.

Details

Engineering, Construction and Architectural Management, vol. 24 no. 4
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 25 July 2018

Xiancun Hu and Chunlu Liu

The purpose of this paper is to develop a simultaneous measurement of overall performance and its two dimensions of efficiency and effectiveness in the case of Chinese…

Abstract

Purpose

The purpose of this paper is to develop a simultaneous measurement of overall performance and its two dimensions of efficiency and effectiveness in the case of Chinese construction industry.

Design/methodology/approach

A relational two-stage data envelopment analysis (DEA) method, which builds a relationship between component stages and can effectively identify inefficient stages, is developed and applied in order to measure overall performance, efficiency and effectiveness.

Findings

The construction industry of the Eastern region in China demonstrated the best results for overall performance, efficiency and effectiveness. The gaps between regions were primarily reflected in differences of pure technical efficiency. Performance indicators in the whole construction industry improved steadily and but could be improved more effectively. The coefficients of variation became smaller and more well-balanced across the whole industry.

Practical implications

Improving overall performance should focus on promoting construction efficiency at the project level and increasing management effectiveness at the company level. Sustainable development policies, which may include large investment and preferential policies, can narrow performance differences among the regions’ construction industries, and ultimately promote overall performance for the whole industry.

Originality/value

The relational two-stage DEA model is further developed in a variable returns-to-scale condition. The developed approach is generic and can provide a pathway for simultaneously measuring performance, efficiency and effectiveness and to recognise competitive advantages for promoting sustainable development.

Details

Engineering, Construction and Architectural Management, vol. 25 no. 6
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 13 April 2021

Qun Gao, Bin Liu, Jide Sun, Chunlu Liu and Youquan Xu

This paper aims to clarify the CO2 emissions of global construction industries under the consideration of different patterns of international trade and thus to draw a…

Abstract

Purpose

This paper aims to clarify the CO2 emissions of global construction industries under the consideration of different patterns of international trade and thus to draw a comprehensive picture for understanding the international paths of CO2 transfer to global construction industries.

Design/methodology/approach

This research inventories the CO2 emissions induced by the final demand of 15 economies for construction products and explores the CO2 intensities of these economies based on a multi-regional input–output model. This paper further decomposes CO2 emissions into four components based on different patterns of international trade to estimate the roles of four patterns of international trade in shaping the environmental pressures from global construction industries.

Findings

The results indicate that the CO2 intensities of the construction industries in Russia, India and China were higher than those in other economies, and the CO2 intensities of global construction industries experienced a decline over the years 2000–2014. The decomposition analysis demonstrates that domestic and foreign CO2 emissions accounted for 42.67 and 54.23%, respectively, of the CO2 emissions of the construction industries in the 15 economies during the period 2000–2007. Although the major part of the CO2 emissions of the construction industries come from domestic production systems, the final demand for construction products in the 15 economies caused substantial emissions in other economies. Further decomposition by upstream industrial production source indicates that 58.65% of domestic emissions and 66.53% of foreign emissions can be traced back to the electricity industry.

Research limitations/implications

Although the major patterns of CO2 emissions of the construction industry have been identified in this paper, the difficulty of understanding the relationship between upstream production industries or countries and the construction industry deserves more attention in the future research.

Originality/value

Previous research on inventorying CO2 emissions has generally been limited to evaluating the impact of industrial consumption activities on national or global emission accounting, tending to ignore the effects of different international trade patterns on the change in industrial CO2 emissions. This research is the first attempt to account for and decompose the CO2 emissions of global construction industries under consideration of the effects of different patterns of international trade on environmental pressures. The decomposition and upstream industrial distributions of different patterns of CO2 emission provide a comprehensive picture for better understanding of the emission pattern and source of the CO2 emissions of global construction industries. The research outcomes reveal how the final demand of a country for construction products induces CO2 emissions in both domestic and foreign systems, thus providing basic information and references for policy adjustment and strategy design in relation to mitigation of climate change and sustainable development.

Details

Engineering, Construction and Architectural Management, vol. 29 no. 1
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 6 December 2019

Shijing Liu, Hongyu Jin, Chunlu Liu, Benzheng Xie and Anthony Mills

The purpose of this paper is to examine public–private partnership (PPP) approaches for the construction of rental retirement villages in Australia and to allocate the…

Abstract

Purpose

The purpose of this paper is to examine public–private partnership (PPP) approaches for the construction of rental retirement villages in Australia and to allocate the investment proportions under a certain project return rate among three investors which are the government, private sectors and pension funds. The apportionment will achieve a minimum overall investment risk for the project.

Design/methodology/approach

Capital structure, particularly determination of investment apportionment proportions, is one of the key factors affecting the success of PPP rental retirement villages. Markowitz mean-variance model was applied to examine the investment allocations with minimum project investment risks under a certain projected return rate among the PPP partners for the construction of rental retirement villages.

Findings

The research findings validate the feasibility of the inclusion of pension funds in the construction of PPP rental retirement villages and demonstrate the existence of relationships between the project return rate and the investment allocation proportions.

Originality/value

This paper provides a quantitative approach for determination of the investment proportions among PPP partners to enrich the theory of PPP in relation to the construction of rental retirement villages. This has implications for PPP partners and can help these stakeholders make vital contributions in developing intellectual wealth in the PPP investment area while providing them with a detailed guide to decision making and negotiation in relation to investment in PPP rental retirement villages.

Details

Built Environment Project and Asset Management, vol. 10 no. 1
Type: Research Article
ISSN: 2044-124X

Keywords

Article
Publication date: 11 March 2022

Qun Gao, Bin Liu, Jide Sun, Chunlu Liu and Youquan Xu

This paper aims to better understand the linkage between CO2 emitters and industrial consumers. The border-crossing frequency is applied to calculate the average number of…

Abstract

Purpose

This paper aims to better understand the linkage between CO2 emitters and industrial consumers. The border-crossing frequency is applied to calculate the average number of steps that a country takes in relation to the CO2 emissions of its construction industry. The maximum border-crossing frequency and declining speed of CO2 transfer are used to reveal the relationship between the length of production chains and the transfer efficiency of construction products.

Design/methodology/approach

This paper maps the CO2 transfer that accompanies global production chains using the frequency of border crossing in the production processes of construction products. As the basic analysis framework, a multi-regional input–output model is adopted to analyse the average border-crossing frequency of CO2 transfer. Additionally, indicators including the maximum border-crossing frequency and declining speed of CO2 transfer are employed. Also, the maximum border-crossing frequency and declining speed of CO2 transfer are used to reveal the relationship between the length of production chains and the transfer efficiency of construction products.

Findings

The results indicate that 85.49% of the CO2 in construction products needs to be processed in at least one country, reflecting that direct trade is the major pattern of transfer of CO2 from primary producers in global construction industries. The maximum border-crossing frequency is 4.88 for 15 economies, meaning that construction products cross the international borders up to 4.88 times before they are absorbed by the final users. The scale of the average border-crossing frequency ranged from 1.16 to 1.87 over 2000–2014, indicating that the original construction products crossed the international borders at least 1.16 times to satisfy the final demand of the consuming countries.

Research limitations/implications

The data from the economic MRIO tables in the WIOD are only available until 2014, which is a limitation for conducting this research in recent years.

Originality/value

The fragmentation of production is not only reshaping global trade patterns, but also leading to the separation of CO2 emitters and final consumers in production chains. A growing number of studies have focussed on the impact of production fragmentation on accounting for regional and national CO2 emissions, but little research has been done at the scale of a specific industry. The major contribution of this paper lies in mapping the CO2 emissions that accompany the production chains of construction products from the perspectives of both magnitude and length. Additionally, this paper is the first to propose using maximum border-crossing frequency and declining speed to analyse the characteristics of global production chains induced by the final demand of major economies for construction products.

Details

Engineering, Construction and Architectural Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 11 May 2022

Jia Zhang, Ding Ding, Chunlu Liu, Mark Luther, Jilong Zhao and Changan Liu

The purpose of this paper is to analyse privacy and interaction preferences in the social dimension of individual learning students and how the spatial configuration…

Abstract

Purpose

The purpose of this paper is to analyse privacy and interaction preferences in the social dimension of individual learning students and how the spatial configuration affects individual learners’ choices of learning spaces.

Design/methodology/approach

This empirical survey study was conducted in an Australian university’s informal learning spaces. Space syntax theories are applied to construct a four-quadrant theoretical framework.

Findings

The research findings indicate that based on the differences between students in their individual characteristics, there are significant differences in their needs for privacy and interaction. This study reveals that the spatial configuration affects individual learners’ choices of learning spaces.

Originality/value

This study could assist universities in providing students with more effective and diverse informal learning spaces.

Details

Facilities , vol. 40 no. 9/10
Type: Research Article
ISSN: 0263-2772

Keywords

Article
Publication date: 17 July 2019

Hongyu Jin, Shijing Liu, Chunlu Liu and Nilupa Udawatta

Targeting public–private partnership (PPP) projects, the purpose of this paper is to help decision makers fairly allocate financial risk between governments and private…

Abstract

Purpose

Targeting public–private partnership (PPP) projects, the purpose of this paper is to help decision makers fairly allocate financial risk between governments and private investors through a properly designed length of concession period.

Design/methodology/approach

On the one hand, the length of the concession period should be long enough to help private investors to achieve their expected profits. On the other hand, the length of a concession period cannot be decided without agreeing on an upper limit, since an overlong concession period takes too much time for governments to recover their investment and leads to an overly lucrative condition for private investors. Following this logic, the concession period decision range is decided, which defines the lower and upper limits for the length of the concession period. The net present values (NPVs) for governments and private investors are estimated via Monte Carlo simulation to better reflect the uncertainties. To further decide on the optimal length of the concession period, the principle of fair risk allocation between governments and private investors is adopted. The concession period, as an important project parameter, should help to minimize the financial risk gap between governments and private investors.

Findings

The developed concession period determination process is validated using a numerical example of a PPP transportation project. The analysis outcomes show that the proposed methodology is capable of determining the length of the concession period so as to control private investors’ profit within a reasonable range while achieving a fair allocation of financial risk between governments and private investors. The outcomes also indicate that, before determining the optimal length for the concession period, governments may need to make a choice between better financial risk allocation or stringent profit control for private investors.

Research limitations/implications

The determination process developed here may be inapplicable to social infrastructure PPPs where the income stream is less predictable. In addition, the data analysis targets a highway project with a capital subsidy provided by the government. To strengthen the effectiveness of the proposed determination process, further research should apply the model to PPPs with other kinds of government support.

Originality/value

The concession period for a PPP project is an important parameter and it is a common practice for governments to predetermine the length of the concession period before inviting tenders. The existing models for determining the concession period focus too much on the simulation of NPVs for project parties and neglect the importance of risk allocation in signing and maintaining a long-term contract. There is also a lack of research to evaluate the influence of governments’ preferences on the length of the concession period. To overcome the limitations of the existing models and enrich the methodology for concession period determination, this paper contributes to the body of knowledge by developing a concession period determination process which can help governments to make better decisions. The financial risk is expected to be more evenly shared between governments and private investors with the concession period derived from the proposed process. This determination process is also capable of evaluating the influence of governments’ preferences on the length of the concession period.

Details

Engineering, Construction and Architectural Management, vol. 26 no. 10
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 14 December 2021

Hongyu Jin, Shijing Liu, Jun Li and Chunlu Liu

Considering there is a lack of research in determining the optimal levels of government guarantee and revenue cap, the objective of this research is to determine their…

Abstract

Purpose

Considering there is a lack of research in determining the optimal levels of government guarantee and revenue cap, the objective of this research is to determine their optimal levels to achieve a reasonable financial risk allocation between governments and private investors while avoiding overly lucrative conditions for private investors.

Design/methodology/approach

Expanded net present value (NPV) analysis and bargaining game theory are employed to construct the core of the determination process. The risk gap between governments and private investors is assessed via an expanded NPV analysis to see if the financial risk has been shared reasonably, based on which the range of the government guarantee is decided. A bargaining model is then created to help locate the optimal level of the government guarantee. Finally, a revenue cap, often combined with the government guarantee in public–private partnership (PPP) agreements, will be determined if overly lucrative conditions for private investors are observed or governments suffer a risk spillover.

Findings

Referring to a real PPP project in Australia, Project BA is created to validate the applicability of the proposed determination process. The outcome shows that the proposed determination process in this paper is capable of determining the optimal levels of government guarantee and revenue cap. The government preferences towards risk allocation will influence the values of the optimal levels. Governments may also consider to alleviate the control over investors' net profits to mobilise private investors into PPP projects.

Research limitations/implications

There is a potential possibility that the revenue cap fails to control the financial risk for governments or the overly lucrative condition for private investors. In other words, even though the revenue cap is set at the minimal level, the financial risk for governments still beyond their tolerance range or the overly lucrative condition for private investors still occurs. Future research may focus on other financial protective schemes which help to better control the financial risks for governments and profits for private investors.

Originality/value

Government guarantees are frequently used as an investment incentive to reduce the probabilities of suffering loss for private investors. Nevertheless, the financial risks for governments may increase after providing guarantees and, as a result, revenue cap is required by governments to avoid placing themselves in an unprotected situation. By recognising the importance of the two contractual parameters, many scholars dig into their option values. However, there are very rare research works focussing on the method of determining the specific levels of government guarantee and revenue cap. To overcome the limitations of existing models and enrich the methodology for government guarantee and revenue cap determination, this paper contributes to the body of knowledge by developing a government guarantee and revenue cap determination process which contributes to a reasonable allocation of financial risks between governments and private investors.

Details

Engineering, Construction and Architectural Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 5 September 2016

Chunlu Liu and Yan Li

The rapid and ongoing expansion of urbanised impervious areas could lead to more frequent flood inundation in urban flood-prone regions. Nowadays, urban flood inundation…

Abstract

Purpose

The rapid and ongoing expansion of urbanised impervious areas could lead to more frequent flood inundation in urban flood-prone regions. Nowadays, urban flood inundation induced by rainstorm is an expensive natural disaster in many countries. In order to reduce the flooding risk, eco-roof systems (or green roof systems) could be considered as an effective mechanism of mitigating flooding disasters through their rainwater retention capability. However, there is still a lack of examining the stormwater management tool. The purpose of this paper is to evaluate the effects on flooding disaster from extensive green roofs.

Design/methodology/approach

Based on geographical information system (GIS) simulation, this research presents a frame of assessing eco-roof impacts on urban flash floods. The approach addresses both urban rainfall-runoff and underground hydrologic models for traditional impervious and green roofs. Deakin University’s Geelong Waurn Ponds campus is chosen as a study case. GIS technologies are then utilised to visualise and analyse the effects on flood inundation from surface properties of building roofs.

Findings

The results reveal that the eco-roof systems generate varying degrees of mitigation of urban flood inundation with different return period storms.

Originality/value

Although the eco-roof technology is considered as an effective stormwater management tool, it is not commonly adopted and examined in urban floods. This study will bring benefits to urban planners for raising awareness of hazard impacts and to construction technicians for considering disaster mitigation via roof technologies. The approach proposed here could be used for the disaster mitigation in future urban planning.

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