| Title |
A Sensitivity Analysis for Risk Management of Private Investment Projects |
| Authors |
Kim, Sun-Kuk ; Park, Tong-Kyu |
| Keywords |
Private Investment Projects ; BTL Projects ; Risk Management ; Sensitive Factors ; Cash Flow |
| Abstract |
Since the partly changed 'Private Investment Act for Social Infrastructure Projects' set forth in January 2005, the number of BTL(Build-Transfer-Lease) projects offered to the market has rapidly increased. The scope of BTL projects offered covers notonly legally defined facilities but several facilities for the private schools. A BTL project, by definition, is a way of projectmanagement that includes the entire process of development such as planning, design, construction and operation over the periodof 20-30 years. As a result, various types of risk may happen at each stage of the project and it is extremely important toefficiently control the sensitive factors that affect the risk profiles of the project. The examples of the sensitive factors areconstruction cost, interest rate, discount rate, lease amount, rental fee, O&M cost and so on. This study examines thecharacteristics of these sensitivity factors, analyzes their impact on the project feasibility and suggests the alternatives to managethem efficiently. |