Table of Contents

Preface .

Acknowledgments .

About the authors.

1 The Nature of Project Finance .

1.1 The world of projects today.

1.2 Corporations, finance and projects; important concepts.

1.3 The project company business model.

1.4 The project cycle.

1.5 System concepts and the project company.

1.6 Plan of the book.

Key Concepts.

2 Complex Transactions .

2.1 Transactions, the cost of transaction, transaction cost economics, and projects.

2.2 A more formal approach to disaggregation of transactions.

2.3 The influence of agency on transaction costs – agency costs.

2.4 Corporate finance context.

2.5 Incentive conflicts in corporate finance.

2.6 Transaction costs and agency – theoretic logic of the project finance model.

Key concepts.

Appendix 2.1 Comparison of long-term debt instruments.

A2.1.1 Syndicated loans.

A2.1.2 International bonds.

3 Financial Evaluation .

3.1 Valuation and the project company.

3.2 Valuation and the project company as a single-asset business.

3.3 Capital budgeting decisions.

Key concepts.

4 Managing Risk in Project Finance Transactions .

4.1 The project cycle revisited.

4.2 Risk management approaches.

4.3 The project company and risk identification.

4.4 Risks in the construction phase.

4.5 The institutional environment and risk.

4.6 Risk management and project lenders.

Key concepts.

5 Continuing Evolution: from PF to PFI, PPP and beyond .

5.1 Introduction.

5.2 PFI origins.

5.3 Types of PFI.

5.4 PFI features.

5.5 Procurement process principles.

5.6 Contract and control structure.

5.7 The special purpose or project vehicle and financing.

5.8 PFI/PPP and rational privatisation.

5.9 Risk management.

5.10 Financial risk in PFI and PPPs.

5.11 Challenges for PFI and PP and the responses.

5.12 The lessons.

Key concepts.

6 The Relevance of Sound Demand in Infrastructure Project Finance –.

The Sydney Cross-City Tunnel .

6.1 Infrastructure finance: the Sydney cross-city tunnel.

6.2 History of the CCT project.

6.3 Cheung Kong Infrastructure Holdings Limited.

6.4 The bidding process.

6.5 Valuing the project.

6.6 Assessing project risks.

6.7 Capital structure.

6.8 Completion of the deal.

6.9 Project outcomes.

7 Financial Structure and Infrastructure Project Finance – The Hong Kong Western Harbour Crossing .

7.1 Refinancing the western harbour crossing, Hong Kong.

7.2 History of the western harbour crossing.

7.3 Valuation of the project.

8 Institutional Risks and Infrastructure Project Finance – The Dabhol Power Project .

8.1 Dabhol power project.

8.2 Development of the Dabhol power project.

8.3 Power purchase agreement.

8.4 Epilogue.

8.5 Analysis.

9 Extreme Complexity in Transacting – Public Private Partnerships at Work in the London Underground .

9.1 Public private partnerships: London Underground.

9.2 Two countries two systems.

9.3 Public private partnership.

References .

Index

About the Author

Frederik Pretorius & Berry Hsu, Department of Real Estate and Construction, University of Hong Kong;

Paul Lejot & Douglas Arner, Faculty of Law, University of Hong Kong;

Arthur McInnis, Faculty of Law, City University of Hong Kong.

Reviews

"An interesting publication with many key aims, it looks to supply the concepts of project finance to academics and students by the utilisation of real projects."
Building Engineer