Chapter 1 Theories of PPP/PFI and Real Option 1
1.1 Introduction to PPP/PFI 1
1.2 Risk Management Aspects of PPP/PFI 5
1.3 Real Option Theory and Application 16
1.4 Summary 28
Chapter 2 Option Design Strategies for Infrastructure Proiects 29
2.1 Interpreting Risks in an Alternative Manner 29
2.2 Risk Management Strategies at Firm and Independent Project Levels 34
2.3 Short Case Studies on Flexibility and Options 36
2.4 Option Design Strategies and Their Relevance to Risks 47
2.5 Summary 50
Chapter 3 Maior Case Study One:Dābhol Power Proiect in India 52
3.1 Background of the Dābhol Power Project 52
3.2 Real Options Embedded in the Project 54
3.3 Quantitative Analysis of the Project 59
3.4 Summary 75
Chapter 4 Maior Case Study Two:The Malaysia-Singapore Second Crossing 77
4.1 Project Background 77
4.2 Conventional Financial Analysis and Cash Flow Models 80
4.3 Project Evaluation Using Real Option 83
4.4 Flexibility in Design and Execution 89
4.5 Summary 96
Chapter 5 Maior Case Study Three:The Wastewater Treatment Plant in Southern China 97
5.1 Background of the Project 97
5.2 Details of the Transaction 98
5.3 Risk Factors Faced by the Concessionaire 104
5.4 Real Options Identified in the Project 105
5.5 Evaluation of the Transaction 107
5.6 Negotiation Band 119
5.7 Risk Comparison between the Two Bidding Scenarios 122
5.8 Summary 123
Chapter 6 New Framework of Risk Management 125
6.1 Common Types of Options in PPP/PFI Projects 125
6.2 An Integrated Real Option—Risk Management Framework 127
6.3 Option Modeling 131
6.4 Real Option and Negotiation 134
6.5 Future Research Direction 137
References 139
Afterwords 145