Economics at your fingertips  

Mitigating risks in wastewater treatment plant PPPs using minimum revenue guarantee and real options

Mohamed Marzouk and Mohamed Ali

Utilities Policy, 2018, vol. 53, issue C, 121-133

Abstract: Uncertainties associated with wastewater treatment plants inflows can lead to either undersized or oversized facilities. Such uncertainties are attributed to the deviation of actual development patterns from plans. Accordingly, a minimum-flow guarantee is a suitable risk mitigation strategy. This research proposes a guarantee evaluation algorithm, and a new stochastic model using real-options theory, in order to simulate the wastewater inflow to the wastewater treatment plant. A wastewater treatment plant in Egypt is examined as a case study. The results enable the monetary evaluation of contractual clauses relating to plant expansion and minimum-flow guarantee.

Keywords: Minimum revenue guarantees; Minimum flow guarantees; Wastewater treatment plants; Risk mitigation; Public-private partnerships; Real-options theory; Egypt (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

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:

Access Statistics for this article

Utilities Policy is currently edited by D. Smith

More articles in Utilities Policy from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2018-11-10
Handle: RePEc:eee:juipol:v:53:y:2018:i:c:p:121-133