Decision Framework for Efficient Risk Mitigation in BOT Highway Infrastructure Service Projects
Publication: Journal of Construction Engineering and Management
Volume 149, Issue 9
Abstract
Revenue risk is the most critical factor that hampers the long-term viability of highway infrastructure service projects. This paper develops an integrated multi-method decision framework to evaluate and compare multiple revenue risk mitigation strategies for build-operate-transfer (BOT) highway infrastructure concessions. Using the project data of a real highway BOT case project in India, this paper models and evaluates various risk mitigation strategies on different performance metrics using Monte Carlo simulation analysis. The technical efficiencies of the risk mitigation strategies are estimated using data envelopment analysis (DEA) and efficient strategies are identified. The findings suggest that strategies comprising appropriate combinations of minimum revenue guarantee, excess revenue share, and revenue shortfall loan mitigate the revenue risk most efficiently. The decision framework and the findings facilitate efficient public infrastructure contract design by policymakers and set multiple research directions.
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Data Availability Statement
The data, models, or code that support the findings of this study are available from the corresponding author upon reasonable request. The project documents used for the analysis are available at https://doi.org/10.7910/DVN/2X1DE6.
Acknowledgments
No funding or grant has been received for this research. We gratefully thank the editorial team and the anonymous reviewers for their valuable suggestions and feedback in improving the quality of the paper.
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Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 149 • Issue 9 • September 2023
Copyright
© 2023 American Society of Civil Engineers.
History
Received: Aug 11, 2022
Accepted: Apr 14, 2023
Published online: Jun 28, 2023
Published in print: Sep 1, 2023
Discussion open until: Nov 28, 2023
ASCE Technical Topics:
- Build-operate-transfer
- Business management
- Construction engineering
- Construction management
- Data analysis
- Disaster risk management
- Engineering fundamentals
- Financial management
- Highway and road management
- Highway transportation
- Highways and roads
- Infrastructure
- Infrastructure vulnerability
- Methodology (by type)
- Mitigation and remediation
- Practice and Profession
- Project management
- Research methods (by type)
- Revenues
- Risk management
- Transportation engineering
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