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Project viability framework for privatized highway projects in Malaysia

The construction sector is one of the indicators of national economic growth and contributed in average of 4% annually to Malaysia’s Gross Domestic Product (GDP) and 6% to the national economy between 1995 - 2015. The excellent of construction growth was mainly from projects implemented under the “P...

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Main Author: Mohamed @ Mohd. Adnan, Azmi
Format: Thesis
Language:English
Published: 2018
Subjects:
TH Building construction
Online Access:http://eprints.utm.my/id/eprint/83988/1/AzmiMohamedPFAB2018.pdf
http://eprints.utm.my/id/eprint/83988/
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spelling my.utm.839882019-11-05T04:33:47Z http://eprints.utm.my/id/eprint/83988/ Project viability framework for privatized highway projects in Malaysia Mohamed @ Mohd. Adnan, Azmi TH Building construction The construction sector is one of the indicators of national economic growth and contributed in average of 4% annually to Malaysia’s Gross Domestic Product (GDP) and 6% to the national economy between 1995 - 2015. The excellent of construction growth was mainly from projects implemented under the “Public-Private Partnership” (PPP) and through privatization. Under the 10th Malaysian Plan, 52 projects with an estimated value of RM62.7 billion will be implemented under Private Finance Initiatives (PFI) for infrastructure works. In fact, the privatization project involves the investment of huge amount of money and project viability depends on the revenue collected against the expenses incurred during the concession period. This research aims to evaluate the project viability and the correlation between the costs and revenue collected for the entire concession period. A comprehensive framework for project viability of highway privatization projects was developed based on the research findings obtained via the use of descriptive analysis and statistical technique analysis. Eleven (11) urban highway projects located in Klang Valley were identified to evaluate the project viability. The techniques of Life Cycle Cost (LCC) are used by the respondents in their projects. The research findings show the most preferred technique used by respondents are Internal Rate of Return (IRR) and Net Present Value (NPV). In sustaining the highway projects, the costs incurred during the concession period should be managed efficiently. The average expenses incurred by the companies for operation and maintenance cost were RM23.22 million and RM21.03 million respectively. Four (4) variables were used to evaluate project’s viability and to identify variables which significantly correlated with the revenue of the project namely operation cost, maintenance cost, actual toll traffic, and revenue. Traffic volume was the variable that correlated positively to the revenue with 44%, followed by the operation cost and maintenance cost with 28% respectively. Traffic volume was the nucleus and dominant variable which contributed to the revenue of the project. Based on the NPV, seven (7) projects (63.6%) were found to be viable and four (4) projects (36.4%) were considered not viable. This research highlighted the viability of the privatized highway projects for an entire concession period. Based on the findings of the current study, a comprehensive framework for future project evaluation comprising of eight (8) components of commercial and technical evaluation for the privatization of highways in Malaysia is recommended. 2018-08 Thesis NonPeerReviewed application/pdf en http://eprints.utm.my/id/eprint/83988/1/AzmiMohamedPFAB2018.pdf Mohamed @ Mohd. Adnan, Azmi (2018) Project viability framework for privatized highway projects in Malaysia. PhD thesis, Universiti Teknologi Malaysia, Faculty of Built Environment. http://dms.library.utm.my:8080/vital/access/manager/Repository/vital:126580
institution Universiti Teknologi Malaysia
building UTM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Malaysia
content_source UTM Institutional Repository
url_provider http://eprints.utm.my/
language English
topic TH Building construction
spellingShingle TH Building construction
Mohamed @ Mohd. Adnan, Azmi
Project viability framework for privatized highway projects in Malaysia
description The construction sector is one of the indicators of national economic growth and contributed in average of 4% annually to Malaysia’s Gross Domestic Product (GDP) and 6% to the national economy between 1995 - 2015. The excellent of construction growth was mainly from projects implemented under the “Public-Private Partnership” (PPP) and through privatization. Under the 10th Malaysian Plan, 52 projects with an estimated value of RM62.7 billion will be implemented under Private Finance Initiatives (PFI) for infrastructure works. In fact, the privatization project involves the investment of huge amount of money and project viability depends on the revenue collected against the expenses incurred during the concession period. This research aims to evaluate the project viability and the correlation between the costs and revenue collected for the entire concession period. A comprehensive framework for project viability of highway privatization projects was developed based on the research findings obtained via the use of descriptive analysis and statistical technique analysis. Eleven (11) urban highway projects located in Klang Valley were identified to evaluate the project viability. The techniques of Life Cycle Cost (LCC) are used by the respondents in their projects. The research findings show the most preferred technique used by respondents are Internal Rate of Return (IRR) and Net Present Value (NPV). In sustaining the highway projects, the costs incurred during the concession period should be managed efficiently. The average expenses incurred by the companies for operation and maintenance cost were RM23.22 million and RM21.03 million respectively. Four (4) variables were used to evaluate project’s viability and to identify variables which significantly correlated with the revenue of the project namely operation cost, maintenance cost, actual toll traffic, and revenue. Traffic volume was the variable that correlated positively to the revenue with 44%, followed by the operation cost and maintenance cost with 28% respectively. Traffic volume was the nucleus and dominant variable which contributed to the revenue of the project. Based on the NPV, seven (7) projects (63.6%) were found to be viable and four (4) projects (36.4%) were considered not viable. This research highlighted the viability of the privatized highway projects for an entire concession period. Based on the findings of the current study, a comprehensive framework for future project evaluation comprising of eight (8) components of commercial and technical evaluation for the privatization of highways in Malaysia is recommended.
format Thesis
author Mohamed @ Mohd. Adnan, Azmi
author_facet Mohamed @ Mohd. Adnan, Azmi
author_sort Mohamed @ Mohd. Adnan, Azmi
title Project viability framework for privatized highway projects in Malaysia
title_short Project viability framework for privatized highway projects in Malaysia
title_full Project viability framework for privatized highway projects in Malaysia
title_fullStr Project viability framework for privatized highway projects in Malaysia
title_full_unstemmed Project viability framework for privatized highway projects in Malaysia
title_sort project viability framework for privatized highway projects in malaysia
publishDate 2018
url http://eprints.utm.my/id/eprint/83988/1/AzmiMohamedPFAB2018.pdf
http://eprints.utm.my/id/eprint/83988/
http://dms.library.utm.my:8080/vital/access/manager/Repository/vital:126580
_version_ 1651866743779360768
score 13.211869

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