Real-option valuation of build-operate-transfer infrastructure projects under performance bonding

Yu-Lin Huang, Chia Chi Pi*

*此作品的通信作者

研究成果: Article同行評審

20 引文 斯高帕斯(Scopus)

摘要

This study assesses the effect of performance bonding on the valuation of a build-operate-transfer (BOT) project by extending the classical Black-Scholes-Merton (BSM) call option model. As common features in BOT contracts, a performance bond is a penalty imposed on concessionaires who exercise contractual rights to terminate participation in a project. In the real-option context, termination rights grant concessionaires the flexibility in managing market uncertainties that can increase the valuation of an infrastructure project, but the penalty impairs this flexibility and reduces valuations. A case study numerically illustrates the BSM model and indicates that performance bonding can destroy the flexibility and project valuations inherent in termination rights even when the penalty is moderate. Balancing performance bonds and termination rights is necessary because both are important in establishing and maintaining long-term contractual relationships in privatized BOT infrastructure projects.

原文English
文章編號04013068
期刊Journal of Construction Engineering and Management
140
發行號5
DOIs
出版狀態Published - 1 5月 2014

指紋

深入研究「Real-option valuation of build-operate-transfer infrastructure projects under performance bonding」主題。共同形成了獨特的指紋。

引用此