Optimizing Concession Agreement Terms and Conditions: Stakeholder Interest Alignment in the Petrochemical Sector

Tatyana Ponomarenko, Ilya Gorbatyuk (), Sergey Galevskiy and Evgenii Marin
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Tatyana Ponomarenko: Organization and Management Department, Saint Petersburg Mining University, 199106 Saint Petersburg, Russia
Ilya Gorbatyuk: Organization and Management Department, Saint Petersburg Mining University, 199106 Saint Petersburg, Russia
Sergey Galevskiy: Organization and Management Department, Saint Petersburg Mining University, 199106 Saint Petersburg, Russia
Evgenii Marin: Organization and Management Department, Saint Petersburg Mining University, 199106 Saint Petersburg, Russia

JRFM, 2024, vol. 17, issue 6, 1-16

Abstract: This article is devoted to the examination of models and the selection of optimal parameters for concession agreements pertaining to construction and operation projects within the pipeline infrastructure of the petrochemical sector. Pipelines are underscored as capital-intensive assets crucial for the organization of complex petrochemical production processes. These processes play a vital role in generating added value, tax revenue, employment opportunities, and fostering territorial development while upholding environmental quality standards. This study aims to ascertain the economic parameters of concession agreements, with a focus on achieving a balance of economic interests between the government and businesses. Through a comparative analysis of fundamental economic and mathematical models of concession agreements, the authors model economic parameters to determine the government’s share in investments and concession fees concerning pipeline projects. Subsequently, an oil product pipeline project is discussed as a case study. The results gleaned from this analysis can be harnessed to optimize the parameters of concession agreements and enhance the economic efficiency of project implementation. Economically viable parameters not only facilitate the execution of concession agreements but also foster the generation of added value, social benefits, and environmental oversight, thus aligning with the principles of sustainable development.

Keywords: public–private partnership; concession agreement; petrochemical sector; procedural-transport infrastructure; government incentive (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2024
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