Hybrid Dynamic Pricing Model for Transport PPP Projects during the Residual Concession Period
Publication: Journal of Construction Engineering and Management
Volume 148, Issue 2
Abstract
Public–Private-Partnerships (PPPs) have been adopted worldwide to deliver infrastructure projects and/or provide public services. Having a reasonable concession price (operation and transfer) in place is pivotal for sustaining a win-win relationship between governments and private sectors. However, historical data have shown that the concession price of PPPs when transfer is less than satisfactory due to the changing attribute of pricing parameters, causing substantial loss of residual value (RV). Nevertheless, a rational and systematic pricing model for PPPs, especially transport PPPs, is not yet available. To this end, a hybrid dynamic pricing model for transport PPPs during the residual concession period underpinned by the case-based reasoning technique is proposed. Furthermore, using a case study of the Western Harbor Crossing tunnel in Hong Kong, the proposed model is validated to be able to account for the dynamic pricing parameters and calculate a reasonable and accurate residual concession price. The contributions of this study are twofold: (1) it highlights that a reasonable concession price beyond the operation period is significant in maintaining RV; and (2) it provides a hybrid dynamic pricing model for governments and private sectors to calibrate the current less-than-satisfactory residual concession price.
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Data Availability Statement
Some or all data, models, or codes that support the findings of this study are available from the corresponding author upon reasonable request.
Acknowledgments
The authors would like to express their appreciation for the reviewers’ constructive and insightful comments and suggestions. The authors would also like to thank the Scientific Research Foundation of Nanjing Institute of Technology (YKJ201986) and National Natural Science Foundation of China (NSFC 71671042) for financial support. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the National Natural Science Foundation and the Scientific Research Foundation of Nanjing Institute of Technology.
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Journal of Construction Engineering and Management
Volume 148 • Issue 2 • February 2022
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Received: Feb 10, 2021
Accepted: Sep 21, 2021
Published online: Dec 7, 2021
Published in print: Feb 1, 2022
Discussion open until: May 7, 2022
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