nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2015‒04‒19
six papers chosen by
Arvi Kuura
Tartu Ülikool

  1. Risk Analysis of Energy Performance Contracting Projects in Russia: An Analytic Hierarchy Process Approach By Garbuzova-Schlifter, Maria; Madlener, Reinhard
  2. Using the WACC to rate a new project By Fabrizio Cacciafesta
  3. Thailand's Economic Integration with Neighboring Countries and Possible Connectivity with South Asia By Chirathivat, Suthiphand; Cheewatrakoolpong, Kornkarun
  4. Public-private Partnerships in Biomedical Research and Health Innovation for Alzhemier's Disease and other Dementias By OECD
  5. Complete Streets: From Policy to Practice in the San Francisco Bay Area By Pande, Swati M.S., MPP; Martinez, Martin MPP
  6. The infrastructural investments in the Polish Euro 2012 host cities By Ferrir, Richard

  1. By: Garbuzova-Schlifter, Maria (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: Systematic and effective risk management in energy performance contracting (EPC) projects requires a sound understanding of the main risks faced by energy service companies (ESCOs) and other energy service providing companies (ESPCs), which accomplish such projects under vulnerable market conditions in Russia. This study explores the EPC project risks (risk factors and their causes) and develops a risk analysis framework that is applied to three Russian sectors: (1) industrial; (2) housing and communal services; and (3) public. The identified general risks were validated by Russian EPC practitioners in expert interviews. An analytic hierarchy process (AHP) approach was then used to rank the identified risks in terms of their contribution to the riskiness of EPC projects. The data were obtained from a web-based questionnaire survey conducted among Russian ESCOs and ESPCs. For improving consistency of the obtained AHP results, the maximum deviation approach (MDA) for 8×8 matrices and the induced bias matrix model (IBBM) for 3×3 and 4×4 matrices were applied. This study indicates that there is a need for a widely usable formal approach for risk analysis and management in EPC projects in Russia. Causes of risk related to the financial and regulatory aspects were found to contribute most to the riskiness of EPC projects performed in all three focus sectors in that country.
    Keywords: Risk analysis; energy performance contracting; EPC; energy service company; ESCO; Russia; analytic hierarchy process; AHP
    Date: 2014–10
  2. By: Fabrizio Cacciafesta (DEF and CEIS University of Rome Tor Vergata)
    Abstract: Warnings commonly formulated about the use of the "weighted average cost of capital" (WACC) are at all inapplicable when dealing with a new project. In this case, namely, the WACC must be calculated with respect to properly defined book values, not to yet non-existing market ones; nor can a really new project be a "carbon copy" of the firm that undertakes it (even admitting that this last already exists). Finally, it is highly improbable that the ratio between debt and equity components of the outstanding invested capital remains constant, nor can be supposed that a Modigliani-Miller type relation connects the two required rates of return. As a consequence, the WACC of the project will in principle be yearly variable, and have therefore the nature of a vector: it is impossible to use it for comparisons, and is exceedingly complicate to use it for discounting. In the whole, to the aim of rating a new project, it can be judged a highly inadvisable tool. Two further remarks. The first: Miller's "non linear WACC" is, on its side, a scalar parameter, but can reliably be used to decide about a new project only in trivial cases. The second: explicitly considering the "tax shield effect" is not necessary to rate a new project. Anyway, the cash flow it generates should be discounted at a rate not bigger than the one used for the debt.
    Keywords: Projects evaluation; WACC; R.A. Miller's "modified WACC"; Modigliani-Miller theorem; tax shield
    JEL: G31 G
    Date: 2015–04–10
  3. By: Chirathivat, Suthiphand (Asian Development Bank Institute); Cheewatrakoolpong, Kornkarun (Asian Development Bank Institute)
    Abstract: Thailand's increasing importance as a regional co-production base and as an intra-regional trade and border trade hub is due mainly to recent changes in its economic structure, namely, the lack of operational workers, rises in wages, and increases in outward foreign direct investment (FDI), together with a change of regional policies in Southeast Asia. As a result, improvements in physical connectivity, trade facilitation, energy cooperation, and financing infrastructure play an important role within an ongoing Association of Southeast Asian Nations (ASEAN) framework. Extending connectivity to South Asia could also complement the current promotion of regional trade and regional production networks. This paper reviews the current stages of Thailand's intra-regional trade, physical connectivity, trade facilitation, energy cooperation, and infrastructure funding as there are projects planned in these areas that could impact Thailand and its links to Southeast Asia and beyond to South Asia. However, Thailand's political instability impedes the progress and implementation of such projects. The paper also examines the current financing mechanism of Thailand's infrastructure projects that relies heavily on public spending. The authors propose strategies to promote Thailand's physical infrastructure, trade facilitation, and energy cooperation with the mainland countries of Southeast Asia and South Asia.
    Keywords: thailand; infrastructure; infrastructure financing; project finance; public-private partnerships
    JEL: F15 F36 H54
    Date: 2015–04–07
  4. By: OECD
    Abstract: The Organisation for Economic Co-operation and Development (OECD), through its Working Party on Biotechnology, undertook a project on “Healthy Ageing and Biomedical Innovation for Dementia and Alzheimer’s disease”. The project was conducted under Output Result 2.1 of the WPB Programme of Work and Budget 2013-14 and aimed to identify good practices to strengthen effective co-operation at a global level for the governance of biomedical technologies and health innovation in Alzheimer’s disease and other dementias. This report is in line with recommendations of the G8 Summit Declaration to strengthen collaboration for innovation and cross-sector partnerships focused on social impact investment, new care and prevention models, and academia/ industry partnerships. It had been informed by a literature review and information on public-private partnership case studies provided by members of the Working Party on Biotechnology.
    Date: 2015–04–09
  5. By: Pande, Swati M.S., MPP; Martinez, Martin MPP
    Abstract: This paper describes how regional funding guidelines can affect local adoption of Complete Streets projects. The Metropolitan Transportation Commission (MTC), the regional Metropolitan Planning Organization for the nine-county Bay Area region in California, has developed a funding approach called the One Bay Area Grant (OBAG) for the allocation of funds for the 2012-2016 Congestion Mitigation and Air Quality (CMAQ) and Surface Transportation Program (STP) across the Bay Area. Each jurisdiction receiving funding through OBAG was required to demonstrate compliance with Complete Streets (CS) policies either by passing a resolution or by certifying that its general plan circulation element was compliant with California’s Complete Streets Act of 2008. This analysis examines the extent and manifestation of this compliance. The OBAG framework allocated significantly more funding to County Congestion Management agencies than was provided during the prior CMAQ/STP cycle (Cycle 1 CMAQ). It also gave counties increased flexibility in decision making by removing program specific silos that were present in Cycle 1 CMAQ. This increased flexibility resulted in an increase in the number of multi-modal projects funded through OBAG. OBAG’s regional funding requirements for Complete Streets compliance through policy have the potential to influence Complete Streets implementation by local agencies in the long term and to serve as a model for other state or local planning agencies seeking to increase investments in pedestrian and bicycle infrastructure.
    Keywords: Engineering, san francisco, complete streets
    Date: 2014–11–15
  6. By: Ferrir, Richard
    Abstract: The most significant value added by Euro 2012 is undoubtedly the infrastructural changes. The event became a catalyst for the execution of more than two hundred projects for an amount of ca. PLN 100 billion. This paper focuses on the key projects, including above all the road construction projects, as well as those connected to road and rail infrastructure. Considering such significant outlays, the funding the preparation, particularly in a division into private and public sources, becomes an especially important issue. It is the predominant commitment of public funds that creates the need to justify their allocation, chiefly in the case of the sports venues, usually utilised by private sports clubs after the end of the event. Euro 2012 has been compared in this respect with other events of this rank, staged in Europe since the beginning of the 21st century.
    Keywords: Euro 2012, Mega sport's event
    JEL: E22 H41
    Date: 2015

This nep-ppm issue is ©2015 by Arvi Kuura. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.