Debt Capacity and Optimal Capital Structure for Privately Financed Infrastructure Projects

Dias, Antônio Alves; Ioannou, Photios G.

doi:10.1061/(asce)0733-9364(1995)121:4(404)

Cited by 59 publications

(36 citation statements)

References 8 publications

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“…More detailed discussion pertaining to the attributes needed to procure successful infrastructure projects using a concession initiatives such as BOOT is contained in Tiong (1996), McCarthy and Tiong (1991), Dias and Ioannou (1995) and Russell and Abdel-Aziz (1997).…”

Section: The Procurement Of Infrastructure Projectsmentioning

confidence: 99%

The privatisation of correctional facilities in Australia

Love

Wood²,

Picken³

et al. 2000

Facilities

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractIn an attempt to improve the effectiveness and efficiency of correctional facilities the Australian Government has recognised the need for their privatisation. Consequently, the Victorian Government initiated an``Infrastructure Investment Policy'', which led to the development of a portfolio called the``New Prisons Project''. This paper presents findings from several prison projects that have been developed using different procurement methods by both the public and private sector. The findings reveal that prisons procured by the private sector using BOO systems are more cost-efficient, specifically in relation to construction and operating costs, than those procured by other means. Discussions on the future of privatising correctional services using BOO systems are also presented. Electronic accessThe research register for this journal is available at

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Section: The Procurement Of Infrastructure Projectsmentioning

confidence: 99%

The privatisation of correctional facilities in Australia

Love

Wood²,

Picken³

et al. 2000

Facilities

View full text Add to dashboard Cite

show abstract

“…(1) Dias and Ioannou, (1995a), considered the value function as a function used to transform an outcome, (i.e., the performance level of an attribute), into the decisionmaker's relative worth for this outcome. Transforming an attribute performance level to its "worth" score, by means of a "value" function, is more complicated than estimating the performance, (quality), level of an attribute directly through the use of a quantitative scale.…”

Section: Methodsmentioning

confidence: 99%

Risk Management Framework for Build, Operate and Transfer (Bot) Projects in Kuwait

Al-Azemi

Bhamra

Salman

2014

Journal of Civil Engineering and Management

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Abstract. Successful implementation of build-operate-transfer (BOT), infrastructure projects is dependent on a full and thorough analysis of factors that include social, economic and political, amongst others. Alongside the financially focused evaluations, qualitative factors will also have a strong impact on the project and so require specific techniques for the analysis. This paper presents a new evaluation framework, based on the analytical hierarchy process technique, for use in assessing the most common and significant decision factors relating to risks in BOT projects. Consultations with an expert group identified a series of risk decision factors. The results produced twenty-eight critical Risk Factors, which have a particular impact on the risks of BOT projects. The project risk framework was constructed by classifying the factors into five categories. The framework was successfully validated using a BOT project case study. This research seeks to make a valuable contribution to the field by having developed and validated a new risk evaluation framework, focused on BOT projects in Kuwait.

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“…Specifically, they incorporated the role of government in the model and also noticed the different perspectives between the stockholders and lenders. Dias and Ioannou (1995) identified the impact of the terms and conditions in the concession agreement on the debt capacity of the project, given the existence of bankruptcy cost. With the objective functions of ROE and the project's NPV, they found that most projects borrow less than the maximum debt capacity.…”

Section: Theory Of Optimal Capital Structure and Its Application In Pppsmentioning

confidence: 99%

“…The private sponsor and the financiers reach agreement on loan amount, borrowing rate and other terms and conditions about the loans, given the concession agreement. These negotiations are complex processes since all parties have conflicting interests (Dias & Ioannou 1995). This section develops a simple approach to provide an approximate solution for practitioners to quickly identify the optimal debt ratio.…”

Section: Theory Of Optimal Capital Structure and Its Application In Pppsmentioning

confidence: 99%

The optimal debt ratio of public–private partnership projects

Chen

Mao²,

2015

International Journal of Construction Management

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Many governments regard the publicÀprivate partnership (PPP) as the best approach to implement high speed rail projects. However, most PPP schemes incorporate long-term debts in the capital structure due to huge initial investments and long recovery periods. An optimal capital structure, meaning the financing mix between debt and equity, maximizes the value of the PPP project. The terms and conditions of the debt are subject to negotiations between the private sponsor and the financiers, given the concession agreement between the host government and the sponsor. Debt ratio is a key term in the project finance funding agreement. This study contributes to the project preparation of PPP schemes by developing a simple model to determine the optimal debt ratio for financing PPP projects and to establish the relationship between debt ratio and hurdle rates of projects' financial indices. Results suggest that the hurdle rate of financial net present value determines the lower limit of debt ratio and the hurdle rate of times interest earned decides the upper limit of debt ratio in the Taiwan high speed rail project.

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Debt Capacity and Optimal Capital Structure for Privately Financed Infrastructure Projects

Cited by 59 publications

References 8 publications

The privatisation of correctional facilities in Australia

The privatisation of correctional facilities in Australia

Risk Management Framework for Build, Operate and Transfer (Bot) Projects in Kuwait

The optimal debt ratio of public–private partnership projects

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