Financial system dynamics model for multidimensional flexibility in toll road PPPs: a life-cycle analysis

Gabriel Castelblanco, Jose Guevara, Giulio Mangano and Carlo Rafele

Construction Management and Economics, 2024, vol. 42, issue 9, 802-821

Abstract: Although scholars have developed simulation models and analyzed bankability criteria in numerous papers to enhance the financial outcomes of Public-Private Partnerships (PPPs), the intersection between both fields considering alternatives to assess the financial impact of flexibility in both scope and financing, remains underdeveloped. To address this gap, this paper introduces a financial model that assesses the financial impact of suitable life-cycle flexibility alternatives while coexisting with revenue performance alterations in each project phase within toll road PPPs. This model serves as a tool to gain insight into the planning of strategic actions to implement flexibility in both scope and financing. Based on system dynamics and validated using financial data from two toll road PPPs in India and East Europe, simulation results suggest that two key drivers (capital expenditures and debt repayment period) have the greatest influence on financial performance. Findings support the implementation of flexible scopes to effectively address the most influential exogenous factor impacting the financial performance of PPPs, namely traffic shortfalls. This model provides a suitable tool for assessing the life-cycle economic sustainability of PPPs in uncertain and complex environments.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/01446193.2024.2335566 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:conmgt:v:42:y:2024:i:9:p:802-821

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RCME20

DOI: 10.1080/01446193.2024.2335566

Access Statistics for this article

Construction Management and Economics is currently edited by Will Hughes

More articles in Construction Management and Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().