A fuzzy simulation model for evaluating the concession items of public-private partnerships schemes

Ng, S.Thomas, Xie, Jingzhu, Skitmore, Martin, & Cheung, Yau Kai (2007) A fuzzy simulation model for evaluating the concession items of public-private partnerships schemes. Automation in Construction, 17(1), pp. 22-29.

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The investment return, tariff regime and concession period are the most important items that influence the success of a concession-based Public-Private Partnership (PPP) project. From the public partner’s perspective, whether a scheme is value-for-money or not dominates the decision making process. However, a seemingly favorable deal may turn out to be the least value-for-money option should it cause unnecessary social upheaval, such as excessive tariff increases or complaints. A scheme which is truly value-for-money is one which balances the interests of the public partner, investor and end-users. In this paper, a simulation model is proposed to assist a public partner to identify the concession period based on the expected investment and tariff regime. The needs for establishing different scenarios to represent the risks and uncertainties involved are presented, and a fuzzy multi-objective decision model is introduced to trade-off the associated three concession items. The combined features of the simulation and fuzzy multi-objective decision models enable the scenario most likely to result in a “win-win-win” concession scheme to be identified. A hypothetical example is used to illustrate the proposed model. This highlights the importance of the decision-makers’ perception of the concession items in influencing their selection, and the influence of the group decision-making involved.

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33 citations in Scopus
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20 citations in Web of Science®

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ID Code: 9426
Item Type: Journal Article
Refereed: Yes
Keywords: Concession period, fuzzy sets, public, private partnership, simulation, tariff regime
DOI: 10.1016/j.autcon.2007.02.010
ISSN: 0926-5805
Subjects: Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000) > BUILDING (120200) > Quantity Surveying (120203)
Divisions: Past > QUT Faculties & Divisions > Faculty of Built Environment and Engineering
Past > Schools > School of Urban Development
Copyright Owner: Copyright 2007 Elsevier
Copyright Statement: Reproduced in accordance with the copyright policy of the publisher.
Deposited On: 12 Sep 2007 00:00
Last Modified: 29 Feb 2012 13:38

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