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Abstract
Governments usually guarantee the amount of investment income to private sector partners to encourage their participation in Public-Private Partnership urban infrastructure development projects, with the ‘float return on investment guarantee’ being the main method in use by the Chinese government today. The current problems with the float return on investment guarantee are analysed and a guarantee approach with embedded motivatio nal behaviour is presented as an alternative. A pricing method option is then introduced as the motivation-embedded return guarantee has similar characteristics to real options. From this, a valuation model is developed that provides the basis of a new systematic method for calculating the government guarantee value.
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Notes on contributors
Qingpeng Man
Qingpeng MAN. Associate Professor and Assistant Chairman of Department of Real Estate and Construction, School of Management, Harbin Institute of Technology, Harbin, China. Member of Construction Economy of Architectural Society of China. His research interests are in infrastructure management, construction risk management, and information management in construction.
Chengshuang Sun
Chengshuang SUN. Associate Professor and Chairman of Department of Real Estate and Construction, School of Management, Harbin Institute of Technology, Harbin, China. Deputy Secretary-general and member of Professional Committee of Management Modernization of China. His research interests are in sustainable construction; information management for construction engineering; and risk management for construction engineering.
Yuesheng Fei
Yuesheng FEI. Senior manager of Industrial Securities Co.,Ltd,15 Jinrong St, Xicheng, Beijing, China. His research interests are in the financing of infrastructure and government behavior.
Martin Skitmore
Martin SKITMORE. Professor of School of Civil Engineering and Built Environment, Queensland University of Technology, Gardens Point, Brisbane, Australia. His research interests include statistical modelling for bidding and cashflow; sustainable development; use of information technologies; and urbanization in China.
Yong Bai
Yong BAI. Chair and Professor of Department of Construction Management and Engineering, North Dakota State University, Fargo, USA. Professional engineer of State of Texas, Fellow of American Society of Civil Engineers, Member of American Society for Engineering Education, and Specially Editor of Journal of Construction Engineering and Management. His research interests are in infrastructure construction and maintenance, highway work zone safety, emerging technology applications, and international construction management.
Weizhuo Lu
Weizhuo LU. Senior lecture of Department of Civil, Environmental and Natural Resources Engineering, Luleå University of Technology, Luleå, Sweden. His research interests are in Construction Engineering and Management.