Boussabaine Risk Pricing Strategies for Public-Private Partnership Projects

1. Auflage 2013
ISBN: 978-1-118-78576-8
Verlag: John Wiley & Sons
Format: EPUB
Kopierschutz: Adobe DRM (»Systemvoraussetzungen)

E-Book, Englisch, 280 Seiten, E-Book

Reihe: Innovation in the Built Environment

The complexity of public-private partnership project procurementrequires an effective process for pricing, managing and appropriateallocation of risks. The level at which risk is priced and themagnitude of risks transferred to the private sector will have asignificant impact on the cost of the PPP deals as well as on thevalue for money analysis and on the section of the optimuminvestment options.
The construction industry tends to concentrate on theeffectiveness of risk management strategies and to some extentignores the price of risk and its impact on whole life cost ofbuilding assets. There is a pressing need for a universal frameworkfor the determination of fair value of risks throughout the PPPprocurement processes.
Risk Pricing Strategies for Public-Private PartnershipProjects addresses the issues of risk pricing and demonstratesthe use of a coherent strategy to arrive at a fair risk price. Thefocus of the book is on providing risk pricing strategies tomaximise return on risk retention and allocation in the procurementof PPP projects. With its up-to-date coverage of the latestdevelopments in risk pricing and comprehensive treatment of themethodologies involved in designing and building risk pricingstrategies, the book offers a simple model for pricing risks.
The book follows a thematic structure: PPP processes map; Risk,uncertainty and bias; Risk pricing management strategies; Riskpricing measurement and modelling; Risk pricing at each of theproject life cycle stages - and deals with all the importantrisk pricing issues, using relevant real-world situations throughcase study examples. It explains how the theory and strategies ofrisk pricing can be successfully applied to real PPP projects andreflects the broad understanding required by today's projectrisk analysts, in their new and important role in PPP contractmanagement.

Autoren/Hrsg.

Boussabaine, Abdelhalim

Inhaltsverzeichnis

Preface ix
Chapter 1 Mapping of the PPP's Processes and Concepts1
1.1 Introduction 1
1.2 Rationale for PPPs 2
1.3 key stages in the PPP procurement process 7
1.4 Financing PPP projects 12
1.5 Rationale for value for money and risk transfer in PPPs16
1.6 PPP project structure 19
1.7 Payment mechanisms in PPPs 25
1.8 PPP emerging issues 28
1.9 Summary 29
References 30
Chapter 2 Uncertainty in Pricing Risk 31
2.1 Introduction 31
2.2 Concepts of Risk and uncertainty 31
2.3 Relationship between risk and uncertainty 44
2.4 Attitudes to risk and uncertainty 46
2.5 Variability and uncertainty 48
2.6 Quantifying uncertainties in risk pricing 50
2.7 Taxonomies of uncertainty 53
2.8 Pricing risk under uncertainty 54
2.9 Summary 55
References 55
Chapter 3 Bias in Risk Pricing 59
3.1 Introduction 59
3.2 Risk bias theories 60
3.3 Sources of bias 66
3.4 Managing bias 81
3.5 Summary 87
References 87
Chapter 4 Management Strategies for Risk Pricing 91
4.1 Introduction 91
4.2 Principles of risk pricing strategies 92
4.3 Risk pricing management strategies 95
4.4 Value gain and loss from risk retention 97
4.5 Risk retention analysis 100
4.6 Resources capability for risk control 103
4.7 Summary 105
References 106
Chapter 5 Framework for Pricing PPP Risks 107
5.1 Introduction 107
5.2 Framework for pricing construction risks 108
5.3 Strategies for risk costing 114
5.4 Risk pricing in PPP transaction 119
5.5 The choice of the discount rate in risk costing 129
5.6 Summary 135
References 136
Chapter 6 Risk Measurement and Modelling 139
6.1 Introduction 139
6.2 Quantifying risks 140
6.3 Probability distributions for risk costing quantification146
6.4 Risk analysis Methods 153
6.5 Selecting a risk analysis technique 162
6.6 How to build a risk pricing BN model 164
6.7 Building risk price models using Monte Carlo simulation169
6.8 Summary 172
References 172
Chapter 7 Risk Allocation Networks in PPP Contracts175
7.1 Introduction 175
7.2 Risk systems in PPP contracts 178
7.3 Modelling the parameters of the risk allocation network180
7.4 The structure of risk allocation networks in PPP contracts181
7.5 Modelling the structure of the risk allocation network185
7.6 The characteristics of a typical PPP risk allocation network186
7.7 Key observations 191
7.8 Summary 192
References 193
Chapter 8 Pricing Development and Construction Risks195
8.1 Introduction 195
8.2 Overview of development and construction risks 196
8.3 Strategies for mitigating and managing development andconstruction risks 209
8.4 Pricing development and construction risks 214
8.5 Summary 218
References 219
Chapter 9 Pricing Operational Risks 221
9.1 Introduction 221
9.2 Overview of operational risks 221
9.3 Strategies for mitigating and managing operational risks228
9.4 Pricing operational risks 233
9.5 Operational risks pricing example 235
9.6 Summary 241
References 241
Chapter 10 Financial Risk Assessment in PPP Projects243
10.1 Introduction 243
10.2 Emergence of risks in project finance 244
10.3 Risk network concepts 246
10.4 Project finance cash Flow risk network 247
10.5 Assessment results 256
10.6 Summary 260
10.7 Acknowledgements 261
References 261
Index 263

Über Autor(innen)

Halim Boussabaine, School of Architecture, University of Liverpool