Government motivation-embedded return guarantee for urban infrastructure projects based on real options

Man, Qingpeng, Sun, Chengshuang, Fei, Yuesheng, Skitmore, Martin, Bai, Yong, & Lu, Weizhuo (2016) Government motivation-embedded return guarantee for urban infrastructure projects based on real options. Journal of Civil Engineering and Management, 22(7), pp. 954-966.

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Abstract

Governments usually guarantee the amount of investment income to private sector partners to encourage their participation in Public-Private Partnership urban infrastructure development projects, with the ‘float return on investment guarantee’ being the main method in use by the Chinese government today. The current problems with the float return on investment guarantee are analysed and a guarantee approach with embedded motivational behaviour is presented as an alternative. A pricing method option is then introduced as the motivation-embedded return guarantee has similar characteristics to real options. From this, a valuation model is developed that provides the basis of a new systematic method for calculating the government guarantee value.

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ID Code: 97920
Item Type: Journal Article
Refereed: Yes
Keywords: Urban infrastructure, government guarantee, real options, motivation behaviour
DOI: 10.3846/13923730.2016.1204362
ISSN: 1822-3605
Subjects: Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000) > BUILDING (120200)
Divisions: Current > Schools > School of Civil Engineering & Built Environment
Current > QUT Faculties and Divisions > Science & Engineering Faculty
Funding:
  • NNSF CHINA/Grant 71201038, 71390522, 51378160 and.
Copyright Owner: 2016 Vilnius Gediminas Technical University (VGTU) Press
Deposited On: 05 Aug 2016 00:08
Last Modified: 05 Sep 2016 16:45

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