VTechWorks staff will be away for the Thanksgiving holiday beginning at noon on Wednesday, November 27, through Friday, November 29. We will resume normal operations on Monday, December 2. Thank you for your patience.
 

Revenue Risk Management for P3 Highway Projects: Implementation of Revenue Guarantees in the U.S. Market

Simple item page
dc.contributor.authorShan, Liangen
dc.contributor.committeechairGarvin, Michael J.en
dc.contributor.committeememberMcCoy, Andrew P.en
dc.contributor.committeememberKumar, Ramanen
dc.contributor.committeememberFiori, Christine M.en
dc.contributor.departmentEnvironmental Design and Planningen
dc.date.accessioned2014-03-14T21:15:01Zen
dc.date.adate2010-06-24en
dc.date.available2014-03-14T21:15:01Zen
dc.date.issued2010-06-02en
dc.date.rdate2010-06-24en
dc.date.sdate2010-06-11en
dc.description.abstractThe Public-Private Partnership (P3 or PPP) model has been proposed as an alternative delivery system to address funding shortage problems associated with large-scale projects. Appropriately allocating and managing risks among project participants is critically important for a P3 project's success. This thesis focuses on one of the tools to manage revenue risk, the revenue guarantee, where a guarantor compensates a concessionaire with a predetermined amount of revenue in the event of a revenue shortfall. It is a form of real option—specifically a put option if a premium is paid for the downside protection or a collar option if potential upside revenue is traded for the protection. Previous research has explored the purpose and valuation of revenue guarantee options. This study focuses on the feasibility of utilizing a guarantee in US P3 highway projects through preparatory study and field investigation. In the preparatory phase, the work examines existing revenue risk management methods and how revenue guarantee options supplement them while also proposing an implementation framework. Additionally, it discusses a new option type,a collar option, including its concept, benefits, applicability, and valuation. In the field investigation phase, the preparatory work is synthesized into interview protocols that are used to seek market perspectives on revenue risks and revenue guarantee feasibility. Twenty people representing government officials, concessionaires, financial advisors and lending institutions were interviewed. The interview results indicated that a revenue guarantee shows promise as a viable tool, and the government should be willing to provide one. The decision to utilize a revenue guarantee depends on funding method selection, a public agency's institutional capacity, and the effectiveness of alternative risk mitigation approaches. Suggestions for implementation, such as applicable projects and a guarantee triggering criterion, are also provided.en
dc.description.degreePh. D.en
dc.identifier.otheretd-06112010-150006en
dc.identifier.sourceurlhttp://scholar.lib.vt.edu/theses/available/etd-06112010-150006/en
dc.identifier.urihttp://hdl.handle.net/10919/38600en
dc.publisherVirginia Techen
dc.relation.haspartShan_L_D_2010.pdfen
dc.relation.haspartShan_L_D_2010_f1.pdfen
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.subjectrevenue guaranteeen
dc.subjectoptionen
dc.subjectinfrastructureen
dc.subjectrisk allocationen
dc.subjectPPPen
dc.titleRevenue Risk Management for P3 Highway Projects: Implementation of Revenue Guarantees in the U.S. Marketen
dc.typeDissertationen
thesis.degree.disciplineEnvironmental Design and Planningen
thesis.degree.grantorVirginia Polytechnic Institute and State Universityen
thesis.degree.leveldoctoralen
thesis.degree.namePh. D.en

Files

Original bundle
Now showing 1 - 2 of 2
Thumbnail Image
Name:
Shan_L_D_2010.pdf
Size:
1.24 MB
Format:
Adobe Portable Document Format
Download
Thumbnail Image
Name:
Shan_L_D_2010_f1.pdf
Size:
300.87 KB
Format:
Adobe Portable Document Format
Download

Collections

Doctoral Dissertations