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Reliability of Public Private Partnership Projects under Assumptions of Cash Flow Volatility

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  • Schöbener, Henning
  • Schetter, Christoph
  • Pfnür, Andreas

Abstract

This paper focuses on dynamic financial modelling of recurring cash flow items in PPP projects in operating stage and on risks associated with the volatility of these cash flows. As we concentrate on so-called government-pays schemes, only cash-outflows are considered, such as operating costs, repairs and maintenance expenses, and administration costs, whereas the revenue side is considered to be not at risk. We show different approaches to modelling the uncertainty of recurring operating expenses and explain how to interpret the results. Our analysis is based on the mathematical framework of stochastic processes, which, in finance, are particularly used to describe price series evolutions in capital markets. We apply them to generate variable trajectories of operating costs and integrate them into a stochastic simulation of the financial model.

Suggested Citation

  • Schöbener, Henning & Schetter, Christoph & Pfnür, Andreas, 2007. "Reliability of Public Private Partnership Projects under Assumptions of Cash Flow Volatility," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 34940, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:34940
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/34940/
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    File URL: http://www.real-estate.bwl.tu-darmstadt.de/media/bwl9/dateien/arbeitspapiere/arbeitspapier_11_reliability_of_ppp_projects.pdf
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    Cited by:

    1. Wonneberger, Sigrun, 2009. "Die Auswahl von Propertymanagement Dienstleistern – Ergebnisbericht zur empirischen Untersuchung," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 36796, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    2. Bachtal, Yassien Nico, 2021. "Work organization and work psychology theories in the context of Work from Home – A literature-based overview," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 128563, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    3. Kämpf-Dern, Annette & Pfnür, Andreas, 2009. "Grundkonzept des Immobilienmanagements. Ein Vorschlag zur Strukturierung immobilienwirtschaftlicher Managementaufgaben," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 37225, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    4. Kämpf-Dern, Annette, 2009. "Immobilienwirtschaftliche Managementebenen und -aufgaben. Definitions-und Leistungskatalog des Immobilienmanagements," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 35573, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).

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