ASSESSMENT AND MODELLING OF FINANCIAL EXPOSURE OF PPP BASED INDIAN HIGHWAY INFRASTRUCTURE PROJECTS (Paper 816)

Recent studies indicate that India must invest more than $150 billion over the next 5 years in the development of urban infrastructure. Lack of the financial resources and limitations in the capacity makes need to have public-private partnerships (PPPs). Unexpected conditions threaten the continuity of the project which arise from the prior knowledge. These barriers are distrust between the public and private sector, a lack of political willingness to develop PPPs, the absence of an enabling institutional environment for PPPs andpoorly designed withunstructured PPP projects. For such kind of scenarios, uncertainties associated with the underground projects must be assessedfor the existing risks and prioritize them to reduce, mitigate and/or even eliminate the financial risks. Some of the major techniques include Monte Carlo simulation or statistical based approach. Parameters such traffic flow, project cost etc. are identified the and models the risk by analysing real world PPP based highway projects in recent studies, however till now, accurate risk analysis cannot be quantified. This research aims to accuratelyestimate various parameters involved with uncertainty associated with NPV. This model is then applied to 30 real world infrastructure projects to identify the critical risk factors. This paper contributes by providing factored logic model to real world PPP based projects which help inmaking investment decisions by private and public sector by identifying weightage for different source of uncertainty on priority basis. Government agencies can use this by identifying the factors that have the largest impacts.