Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/74686
Title: Real options model of toll-adjustment mechanism in concession contracts of toll road projects
Authors: Chen, Q
Shen, G 
Xue, F
Xia, B
Keywords: Public-private partnership (PPP)
Real options
Toll road projects
Toll-adjustment mechanism (TAM)
Traffic demand risk
Issue Date: 2018
Publisher: American Society of Civil Engineers
Source: Journal of management in engineering, 2018, v. 34, no. 1, 04017040, p. 2 How to cite?
Journal: Journal of management in engineering 
Abstract: The toll-adjustment mechanism (TAM) is a hybrid of a price cap regulation mechanism and a revenue sharing mechanism. It is one solution to saving private investors from severe traffic demand risk and the government from heavy fiscal burden, while ensuring the private investor a reasonable but not excessive rate of return in a public-private partnership (PPP) concession contract. This research models TAM as a real option to assess the value of flexibility of the right (but not obligation) to toll adjustments. A hypothetical case study derived from a real-life project (the Western Harbour Crossing in Hong Kong) is illustrated in detail to demonstrate the application of the framework developed and to validate the effectiveness and robustness of the framework. Outcomes of the research can help the government to design reasonable concession contracts and help the private investors to make sound investment decisions through effective management of the traffic demand risk. Therefore, a win-win prospect can be achieved in PPP concession contracts for both parties.
URI: http://hdl.handle.net/10397/74686
ISSN: 0742-597X
EISSN: 1943-5479
DOI: 10.1061/(ASCE)ME.1943-5479.0000558
Appears in Collections:Journal/Magazine Article

Access
View full-text via PolyU eLinks SFX Query
Show full item record

SCOPUSTM   
Citations

3
Last Week
0
Last month
Citations as of Feb 20, 2019

WEB OF SCIENCETM
Citations

2
Last Week
0
Last month
Citations as of Feb 19, 2019

Page view(s)

21
Last Week
3
Last month
Citations as of Feb 19, 2019

Google ScholarTM

Check

Altmetric


Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.