Modeling optimal thresholds for minimum traffic guarantee in public–private partnership (PPP) highway projects

Abstract

Optimal upper and lower thresholds model for traffic guarantee are proposed to optimize the risk allocation between a government and a concessionaire considering the perspective of lenders and the risk tolerances of the participants. In this study, the condition for the lender to provide the loan is that the default probability of the project does not exceed the acceptable maximum default probability of the lender. The proposed model uses risk weights to reflect the risk tolerances of government and the concessionaire and adopts a Gini coefficient for risk to describe the rationality of risk allocation. The application of the model to a highway project shows that a traffic guarantee with optimal thresholds effectively balances the project risks for both the government and concessionaire.

Additional information

Funding

This work was supported by the [Chinese Government Scholarship] under Grant [number 201707000021]. The authors also really appreciate for research data support of SHANDONG HI-SPEED GROUP CO., LTD.

Notes on contributors

Zhenyao Wu

Zhenyao Wu was born in Guiyang, Guizhou, P.R. China, in 1993. She received the doctoral degree from Southwest Jiaotong University, P.R. China. Now, she works in Guizhou Communications Polytechnic as a lecturer. Her research interests include transportation economy and project management. E-mail: [email protected]

Shinya Hanaoka

Shinya Hanaoka (Corresponding Author): Professor at the Department of Transdisciplinary Science and Engineering, School of Environment and Society, Tokyo Institute of Technology, Japan. He received a Ph.D. from Tohoku University in Sendai, Japan. He has worked as a Researcher at the Institute for Transport Policy Studies in Tokyo, an Assistant Professor at the Asian Institute of Technology in Bangkok, and an Associate Professor at the Department of International Development Engineering, Tokyo Institute of Technology. His research interests include air transport, maritime transport, transport logistics and transport development studies. E-mail: [email protected]

Bin Shuai

Bin Shuai was born in Leshan, Sichuan, P.R. China, in 1967. He received the doctoral degree from Southwest Jiaotong University, P.R. China. Now, he works in School of Transportation and Logistics, Southwest Jiaotong University as a professor, His research interests include transportation economy and transportation security. E-mail: [email protected]