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Performance-based payment structural design for infrastructure PPP projects
- Source :
- International Journal of Strategic Property Management; Vol 27 No 2 (2023); 133–145
- Publication Year :
- 2023
- Publisher :
- Vilnius Gediminas Technical University, 2023.
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Abstract
- The performance-based payment structure has been widely used in infrastructure PPP projects. However, existing research has been absent on the structural unbalance problem of performance-based payment in the current infrastructure PPP projects. This study aims to construct an optimal proportion of the performance-based payment in the total payment, and then design a performance-based payment structure for infrastructure PPP projects. Firstly, the definition of the performance-linked rate is introduced to characterize the proportion of the performance-based payment. Secondly, based on the different objectives of the maximum social benefit and the minimum cost for the public and private sectors, a multi-objective optimization model is constructed to obtain a reasonable value range of the performance-linked rate. Thirdly, the impacts on different parameters in the performance-linked rate are revealed using simulation methods. Finally, the numerical and simulation results show that, for the weak social average ability, the social cost is also high, and a large performance-linked rate should be set. Conversely, when the social average ability is strong, the social average cost is relatively reduced, and a relatively low performance-linked rate should be set. Consequently, the results can guide the contract design in PPP projects.
Details
- Language :
- English
- ISSN :
- 1648715X and 16489179
- Database :
- OpenAIRE
- Journal :
- International Journal of Strategic Property Management
- Accession number :
- edsair.vilniusgedim..2895b49012ea98a3bfe4e1c209febeed