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Mitigating risks in wastewater treatment plant PPPs using minimum revenue guarantee and real options

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  • Marzouk, Mohamed
  • Ali, Mohamed

Abstract

Uncertainties associated with wastewater treatment plants inflows can lead to either undersized or oversized facilities. Such uncertainties are attributed to the deviation of actual development patterns from plans. Accordingly, a minimum-flow guarantee is a suitable risk mitigation strategy. This research proposes a guarantee evaluation algorithm, and a new stochastic model using real-options theory, in order to simulate the wastewater inflow to the wastewater treatment plant. A wastewater treatment plant in Egypt is examined as a case study. The results enable the monetary evaluation of contractual clauses relating to plant expansion and minimum-flow guarantee.

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  • Marzouk, Mohamed & Ali, Mohamed, 2018. "Mitigating risks in wastewater treatment plant PPPs using minimum revenue guarantee and real options," Utilities Policy, Elsevier, vol. 53(C), pages 121-133.
    • Handle: RePEc:eee:juipol:v:53:y:2018:i:c:p:121-133
    DOI: 10.1016/j.jup.2018.06.012
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    6. Jiangang Shi & Kaifeng Duan & Guangdong Wu & Rui Zhang & Xiaowei Feng, 2020. "Comprehensive metrological and content analysis of the public–private partnerships (PPPs) research field: a new bibliometric journey," Scientometrics, Springer;Akadémiai Kiadó, vol. 124(3), pages 2145-2184, September.
    7. Yuqun Dong & Yaming Zhuang, 2023. "Research on an Investment Decision Model of Waste Incineration Power under Demand Guarantee Policies," Sustainability, MDPI, vol. 15(15), pages 1-19, July.
    8. Meishu Wang & Hui Gong, 2018. "Imbalanced Development and Economic Burden for Urban and Rural Wastewater Treatment in China—Discharge Limit Legislation," Sustainability, MDPI, vol. 10(8), pages 1-12, July.
    9. Antonio Di Bari, 2021. "A barrier real option approach to evaluate public–private partnership projects and prevent moral hazard," SN Business & Economics, Springer, vol. 1(3), pages 1-19, March.
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