Document Type
Article
Publication Date
7-12-2016
Publisher
Vilnius Gediminas Technical University
Source Publication
Journal of Civil Engineering and Management
Source ISSN
1392-3730
Abstract
Governments usually guarantee the amount of investment income to private sector partners to encourage their participation in Public-Private Partnership urban infrastructure development projects, with the ‘float return on investment guarantee’ being the main method in use by the Chinese government today. The current problems with the float return on investment guarantee are analysed and a guarantee approach with embedded motivational behaviour is presented as an alternative. A pricing method option is then introduced as the motivation-embedded return guarantee has similar characteristics to real options. From this, a valuation model is developed that provides the basis of a new systematic method for calculating the government guarantee value.
Recommended Citation
Man, Qingpeng; Sun, Chengshuang; Fei, Yuesheng; Skitmore, Martin; Bai, Yong; and Lu, Weizhuo, "Government Motivation-embedded Return Guarantee for Urban Infrastructure Projects Based on Real Options" (2016). Civil and Environmental Engineering Faculty Research and Publications. 308.
https://epublications.marquette.edu/civengin_fac/308
Comments
Published version. Journal of Civil Engineering and Management, Vol. 22, No. 7 (July 12, 2016) :954-966. DOI. © 2016 Vilnius Gediminas Technical University. Used with permission.
Yong Bai was affiliated with North Dakota State University at the time of publication.