Desirability Model for the Development of Privately-Promoted Infrastructure Projects
Antonio Dias, Jr. and Photios G. Ioannou
Civil & Environmental Engineering Department
University of Michigan
Ann Arbor, Michigan 48109-2125, U.S.A.
BOT, BOO, infrastructure, private promotion, project finance, private project development, evaluation, multiattribute utility, decision analysis.
Dias, A., and P.G. Ioannou, P.G., A Desirability Model for the Development of Privately-Promoted Infrastructure Projects, Volumes I and II, UMCEE Report No. 95-09, Civil and Environmental Engineering Dept., Univ. of Michigan, May 1995, 320 pp.
The ability of governments to operate, maintain and finance infrastructure is increasingly being questioned. Many facilities have been inefficiently operated and inadequately maintained, social needs have been neglected, and governments have been spending more on infrastructure than they can manage. The private promotion of infrastructure projects is a key mechanism for providing new facilities that has advantages for the public and private sectors. This study focuses on the participation of private-sector companies in the development, financing, construction, operation, and ownership of infrastructure projects. It provides a thorough discussion of the essential issues and concepts involved in the promotion of projects via concession arrangements or privatization.
Questionnaires were sent to 15 renowned experts to gather information about the desirable attributes of promoting companies and projects. As a result, a multiattribute additive hierarchical model, called the Desirability Model, has been developed to evaluate (i) the capability of companies to participate in the promotion of projects and (ii) the feasibility of projects to be pursued by private promotion. A total of 23 attributes have been identified as able to characterize the quality level of companies and projects. Validation was performed and the results indicate that the model closely captures the preferences of the respondents.