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Reliability of Public Private Partnership Projects under Assumptions of Cash Flow Volatility

Schöbener, Henning and Schetter, Christoph and Pfnür, Andreas (2007):
Reliability of Public Private Partnership Projects under Assumptions of Cash Flow Volatility.
Darmstadt, Fachgebiet Immobilienwirtschaft und Baubetriebswirtschaftslehre, Fachbereich Rechts- und Wirtschaftswissenschaften, Technische Universität Darmstadt, p. 26, In: Pfnür, Andreas (Hrsg.), Arbeitspapiere zur immobilienwirtschaftlichen Forschung und Praxis, Band Nr. 11, [Online-Edition: http://www.real-estate.bwl.tu-darmstadt.de/media/bwl9/dateie...],
[Report]

Abstract

This paper focuses on dynamic financial modelling of recurring cash flow items in PPP projects in operating stage and on risks associated with the volatility of these cash flows. As we concentrate on so-called government-pays schemes, only cash-outflows are considered, such as operating costs, repairs and maintenance expenses, and administration costs, whereas the revenue side is considered to be not at risk. We show different approaches to modelling the uncertainty of recurring operating expenses and explain how to interpret the results. Our analysis is based on the mathematical framework of stochastic processes, which, in finance, are particularly used to describe price series evolutions in capital markets. We apply them to generate variable trajectories of operating costs and integrate them into a stochastic simulation of the financial model.

Item Type: Report
Erschienen: 2007
Creators: Schöbener, Henning and Schetter, Christoph and Pfnür, Andreas
Title: Reliability of Public Private Partnership Projects under Assumptions of Cash Flow Volatility
Language: English
Abstract:

This paper focuses on dynamic financial modelling of recurring cash flow items in PPP projects in operating stage and on risks associated with the volatility of these cash flows. As we concentrate on so-called government-pays schemes, only cash-outflows are considered, such as operating costs, repairs and maintenance expenses, and administration costs, whereas the revenue side is considered to be not at risk. We show different approaches to modelling the uncertainty of recurring operating expenses and explain how to interpret the results. Our analysis is based on the mathematical framework of stochastic processes, which, in finance, are particularly used to describe price series evolutions in capital markets. We apply them to generate variable trajectories of operating costs and integrate them into a stochastic simulation of the financial model.

Series Name: Pfnür, Andreas (Hrsg.), Arbeitspapiere zur immobilienwirtschaftlichen Forschung und Praxis, Band Nr. 11
Place of Publication: Darmstadt
Publisher: Fachgebiet Immobilienwirtschaft und Baubetriebswirtschaftslehre, Fachbereich Rechts- und Wirtschaftswissenschaften, Technische Universität Darmstadt
Uncontrolled Keywords: Public Private Partnerships; Operating Costs; Risk Modelling; Stochastic Processes; Stochastic Simulation
Divisions: 01 Department of Law and Economics
01 Department of Law and Economics > Betriebswirtschaftliche Fachgebiete
01 Department of Law and Economics > Betriebswirtschaftliche Fachgebiete > Fachgebiet Immobilienwirtschaft und Baubetriebswirtschaftslehre
Date Deposited: 24 Aug 2009 16:34
Official URL: http://www.real-estate.bwl.tu-darmstadt.de/media/bwl9/dateie...
Additional Information:

26 S.

Identification Number: ISSN Nr. 1862-2291
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