Early termination compensation under demand uncertainty in public-private partnership projects
In the early termination of public-private partnership (PPP) projects, compensation is considered a core issue that greatly affects the interests of the government and the private sector. To address the early termination that is frequently caused by government default or voluntary buyback, this pape...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Vilnius Gediminas Technical University
2018-11-01
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| Series: | International Journal of Strategic Property Management |
| Subjects: | |
| Online Access: | http://journals.vgtu.lt/index.php/IJSPM/article/view/6049 |
| _version_ | 1819158554367492096 |
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| author | Jinbo Song Yanzhu Yu Lulu Jin Zhuo Feng |
| author_facet | Jinbo Song Yanzhu Yu Lulu Jin Zhuo Feng |
| author_sort | Jinbo Song |
| collection | DOAJ |
| description | In the early termination of public-private partnership (PPP) projects, compensation is considered a core issue that greatly affects the interests of the government and the private sector. To address the early termination that is frequently caused by government default or voluntary buyback, this paper proposes an ex-ante compensation mechanism using the cumulative probability that a given demand could be realized to determine early termination compensation under demand uncertainty. By splitting the compensation into two parts, the base compensation could be the minimum compensation for the private sector, while the additional compensation is considered a reasonable allocation of future booming demand. The predetermined compensation criterion ensures a smooth transfer of the early terminated project, which not only benefits the government from being overcharged, but also enables the private sector to gain a reasonable compensation for the remaining concession period. |
| first_indexed | 2024-12-22T16:26:30Z |
| format | Article |
| id | doaj.art-3fa43aa15b554237a719efc9907293df |
| institution | Directory Open Access Journal |
| issn | 1648-715X 1648-9179 |
| language | English |
| last_indexed | 2024-12-22T16:26:30Z |
| publishDate | 2018-11-01 |
| publisher | Vilnius Gediminas Technical University |
| record_format | Article |
| series | International Journal of Strategic Property Management |
| spelling | doaj.art-3fa43aa15b554237a719efc9907293df2022-12-21T18:20:09ZengVilnius Gediminas Technical UniversityInternational Journal of Strategic Property Management1648-715X1648-91792018-11-0122610.3846/ijspm.2018.6049Early termination compensation under demand uncertainty in public-private partnership projectsJinbo Song0Yanzhu Yu1Lulu Jin2Zhuo Feng3Faculty of Management and Economics, Dalian University of Technology, Dalian, ChinaFaculty of Management and Economics, Dalian University of Technology, Dalian, ChinaFaculty of Management and Economics, Dalian University of Technology, Dalian, ChinaFaculty of Management and Economics, Dalian University of Technology, Dalian, ChinaIn the early termination of public-private partnership (PPP) projects, compensation is considered a core issue that greatly affects the interests of the government and the private sector. To address the early termination that is frequently caused by government default or voluntary buyback, this paper proposes an ex-ante compensation mechanism using the cumulative probability that a given demand could be realized to determine early termination compensation under demand uncertainty. By splitting the compensation into two parts, the base compensation could be the minimum compensation for the private sector, while the additional compensation is considered a reasonable allocation of future booming demand. The predetermined compensation criterion ensures a smooth transfer of the early terminated project, which not only benefits the government from being overcharged, but also enables the private sector to gain a reasonable compensation for the remaining concession period.http://journals.vgtu.lt/index.php/IJSPM/article/view/6049public-private partnershipearly terminationcompensationrisk managementMonte Carlo simulationdemand uncertainty |
| spellingShingle | Jinbo Song Yanzhu Yu Lulu Jin Zhuo Feng Early termination compensation under demand uncertainty in public-private partnership projects International Journal of Strategic Property Management public-private partnership early termination compensation risk management Monte Carlo simulation demand uncertainty |
| title | Early termination compensation under demand uncertainty in public-private partnership projects |
| title_full | Early termination compensation under demand uncertainty in public-private partnership projects |
| title_fullStr | Early termination compensation under demand uncertainty in public-private partnership projects |
| title_full_unstemmed | Early termination compensation under demand uncertainty in public-private partnership projects |
| title_short | Early termination compensation under demand uncertainty in public-private partnership projects |
| title_sort | early termination compensation under demand uncertainty in public private partnership projects |
| topic | public-private partnership early termination compensation risk management Monte Carlo simulation demand uncertainty |
| url | http://journals.vgtu.lt/index.php/IJSPM/article/view/6049 |
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