Developing a Revenue Sharing Method for an Operational Transfer-Operate-Transfer Project

Abstract

The transfer-operate-transfer (TOT) project model is used widely as a commercial framework for public-private-partnerships to support provision of infrastructure and enable the delivery of services. However, operational delivery of such projects can encounter certain challenges, such as the need for improved revenue sharing between governmental and private partners. The purpose of this paper is to design a revenue sharing method (RSM) that satisfies the revenue-sharing forecast in the contract design stage and the realized revenue sharing in the contract execution period for an operational TOT project. This approach identifies the impact of external uncertainty and effort level as well as the input ratio on revenue sharing of participants, distributes and reasonably minimizes the project revenue uncertainty among the participants, and achieves an improved matching of the participants’ revenue sharing with their risk-sharing, resource input and effort level. The paper utilizes the fuzzy-payoffs Shapley value method for revenue distribution for an operational TOT project, where the fuzzy alliance and input ratio coefficient are adopted to gradually optimize the Shapley value and form the RSM of an operational TOT project. The RSM allows prediction of the revenue sharing of participations under uncertain conditions of project revenue and supports improved decision-making by participants.

A risk-adjusted decoupled-net-present-value model to determine the optimal concession period of BOT projects

“…However, this also might suggest that the private sector is efficient in the operation of the project, or equally, the demand for the project services is higher than forecasted (Wang and Liu, 2015). Consequently, this will increase public sector debt (Du et al, 2019). This implicitly will be assumed as a liability on the public sector balance sheet leading to further expenditure requirements.…”

“…Equally, one also might argue that the longer the concession period is, the better the construction quality of the infrastructure project when is handed over to the public sector. To solve the conundrum of the relationship between expenditure and revenue risks, it was suggested to use revenue sharing to avoid excessive returns for the concessionaire (Du et al, 2019, Liu et al, 2017.…”

Preliminary Reflection on Basic Problematics of National Public Infrastructure Financing in Indonesia

“…In principle, it can be divided into three: self-financing by using Public Budget, by using the Loan from International Bank (World Bank (WB), Asian Development Bank (ADB), International Bank for Reconstruction and Development (IBRD), Japan International Cooperation Agency (JICA0, etc), and by Public-Private Partnership (PPP). Each of this three modes has its various derivatives and its various characteristics and problems (Andreas et al, 2019;Andriyani, 2019;Benson & Sugiana, 2010;Crosetti, 2010;Du et al, 2019;Goh & Yang, 2019;Maire de Paris, 2018;Mandasari & Wahyuni, 2019;Putri & Wisudanto, 2016;Thabib & Kurniawan, 2018).…”

“…Therefore, instead of thinking about how the NREB must be arranged, it is logical to think to involve the Private Fund to participate in the Public Infrastructure development and operation. The Private Fund involvement must be based on the Attractive Commercial Activity (Andreas et al, 2019;Crosetti, 2010;Du et al, 2019;Kepala Bappenas, 2012;Mandasari & Wahyuni, 2019;Putri & Wisudanto, 2016;Susantono & Berawi, 2012;Usubaliev, 2019). This big, vital, and important problem needs to be thought and solved.…”

Perspective of Local Government on the Performance Assessment of District Sports and Leisure Centers

“…However, Taiwan's civil SLCs were built up through central or local government funding and then were operated and transferred to private firms within concession years in order to make their operating more efficient and generate higher revenue for the local authority, in contrast to the SLCs subsidized by the local government in the UK. The operate-transfer project finance model used public-private partnership as a business model to support government provision and deliver the services through private firms [31]. The aims of the Department of Sports under the Taipei City Government are to plan, construct, manage, and maintain public sports venues and facilities in Taipei City, to establish sets of authoritative regulations, to supervise the government outsourcing to private corporations to improve the profitability of sports industry, and to increase the operational efficiency and satisfaction of the sport facilities [30].…”