Infrastructure Investment Projects Research Articles

The Feasibility Study Report as an Effective Tool to Evaluate Investment Projects: A Solid Waste Treatment Project as a Case Study

Hundreds of infrastructure investment projects are inserted into the Iraqi government budget annually. Many of these projects suffer from suspension, delay in completion, corruption, or other negative issues known in Iraqi construction projects. This may harm the country's economic recovery due to allocating funds to useless projects from one or more feasibility studies' components. Therefore, the best solution is to pay attention to the feasibility study reports. This study highlights the importance of feasibility studies reports for investment projects and their effective role in evaluating project ideas to ensure an equitable distribution of a country's financial resources to the most feasible investment projects. This importance was highlighted through a practical case study for a solid waste treatment project. The results of the case study showed that feasibility studies provide very important information on which investors and governments can rely to make the appropriate decisions for investment projects. The study also addressed the risks that investors can be exposed to in Iraq and how to include them in the economic analysis of feasibility studies.

Automatic monitoring and early warning method for power grid infrastructure investment progress using building information model and blockchain

AbstractIn order to improve the precise control level of power grid infrastructure investment, this paper proposes a monitoring and early warning method of power grid infrastructure investment progress based on building information model and blockchain. By capturing the project construction progress images, the features of the power grid infrastructure are extracted automatically. Combined with the technical characteristics of distributed, tamper‐proof, and traceable blockchain, statistical indicators are generated automatically, monitoring and early warning of the investment progress execution deviation are triggered by the rules running on the smart contracts. The case study results show that the mean absolute error of the target image recognition method based on the image features is 4.32%, and the prediction accuracy of the incoming line is better than that of the engineering civil and substation. The early warning model of investment statistics based on smart contracts can automatically monitor the investment progress and generate early warnings, which provides a basis for the dynamic adjustment of the investment plan, and effectively improves the refined management level of power grid infrastructure investment projects.

China's State Capitalism and International Responses: A Comparative Analysis of Infrastructure Investment Strategies

Abstract: By introducing the Belt and Road Initiative (BRI), an international infrastructure investment strategy, China attracted a lot of attention. China's approach to state capitalism has opened a window of opportunity for other infrastructure investment strategies. In response, the world's largest and liberally minded economies, such as the United States of America, Japan, and the European Union, have focused on connectivity and embarked on similar strategies. In this article, I conduct a comparative analysis of infrastructure investment strategies. I analyze key tenets of the BRI and international responses through the prism of principles, priorities, funding, financing, governance, and implementation. The comparison of strategies highlights more commonalities than differences, and I identify several instances in which liberal economies act in contradiction to their variety of capitalism. The results suggest that China has opened a window of opportunity for proactive infrastructure investment strategies, and major economies have responded in kind. With overlapping emphases in similar geographic regions, these strategies lead to competition. Consequently, recipient countries profit from an advantageous negotiating position when seeking to attract foreign direct investment in infrastructure projects.

СПОСОБЫ ФИНАНСИРОВАНИЯ И ОЦЕНКИ ИНФРАСТРУКТУРНЫХ ИНВЕСТИЦИОННЫХ ПРОЕКТОВ

This article presents an improved methodology for the comprehensive assessment of infrastructure investment projects in Russia, which, among other things, includes a description of financing schemes for such projects. The relevance of the research topic lies in the fact that the modern development of Russia is aimed at attracting investments in the creation and modernization of existing infrastructure, therefore it is important to evaluate such projects correctly and from different sides. At the moment, many opportunities for the development of the country’s economy and the achievement of stable economic growth are determined by investment processes. That is why, in order to attract investments in such projects, it is necessary to take into account the different effects of their implementation.

Impact of project financiers’ strategies on de-risking infrastructural projects: A conceptual review

Infrastructure projects encounter significant risks which often deter financiers from investing in them. To address these risks, financiers have developed and applied several strategies aimed at encouraging investment. Therefore, this study reviewed several literatures from the past ten years on the strategy used by both public and private financiers to reduce risks and encourage investment in infrastructure projects. From the literature reviewed, several strategies such as risk allocation & mitigation, blended finance, issuance of green bonds, and stakeholders’ engagement in project selection were utilized by major project financiers in making investment decisions. Other factors such as political stability, economic indicators, insurance & guarantees, and legal & regulatory framework were also identified to positively impact investment decisions on infrastructure projects. From the findings, a conceptual framework linking the project financiers’ proxies (risk allocation & mitigation, blended finance, issuance of green bond, and stakeholders’ engagement in project selection) to that of the proxies of de-risking (political stability, economic indicators, insurance & guarantees, and legal & regulatory framework) was developed with the outcome showing the positive impact of both proxies on project financiers’ investment decision. The magnitude of the impact of each proxy on investment decisions is a subject of future study.

Europe’s Global Gateway: A New Instrument of Geopolitics

In December 2021, the EU member states agreed on the Global Gateway strategy to mobilize public and private funds of up to €300 billion between 2021 and 2027, to invest in digital, climate and energy, transport, health, education, and research fields. With a geographical focus on Africa, Global Gateway links infrastructure investment projects with condition principles—including democratic values, good governance, and transparency—and catalyzes private investment into EU development financing. Against this backdrop, this study explores why EU member states agreed on this new geopolitical instrument. This piece posits that the confluence of three factors enabled the creation of Global Gateway. First, the EU established this new instrument to counter China’s role as a global infrastructure lender in Africa. Second, Global Gateway was possible through the shift to private investment in multilateral development financing. Equally important for the establishment of Global Gateway was the European Commission’s transformational leadership as an entrepreneurial agent in designing this geopolitical strategy of the EU’s power projection. The conclusion outlines future research avenues and enables readers to consider the wider prospects and caveats of the Global Gateway strategy.

An artificial neural network (ANN) approach for early cost estimation of concrete bridge systems in developing countries: the case of Sri Lanka

PurposeThe Government’s investment in infrastructure projects is considerably high, especially in bridge construction projects. Government authorities must establish an initial forecasted budget to have transparency in transactions. Early cost estimating is challenging for Quantity Surveyors due to incomplete project details at the initial stage and the unavailability of standard cost estimating techniques for bridge projects. To mitigate the difficulties in the traditional preliminary cost estimating methods, there is a requirement to develop a new initial cost estimating model which is accurate, user friendly and straightforward. The research was carried out in Sri Lanka, and this paper aims to develop the artificial neural network (ANN) model for an early cost estimate of concrete bridge systems.Design/methodology/approachThe construction cost data of 30 concrete bridge projects which are in Sri Lanka constructed within the past ten years were trained and tested to develop an ANN cost model. Backpropagation technique was used to identify the number of hidden layers, iteration and momentum for optimum neural network architectures.FindingsAn ANN cost model was developed, furnishing the best result since it succeeded with around 90% validation accuracy. It created a cost estimation model for the public sector as an accurate, heuristic, flexible and efficient technique.Originality/valueThe research contributes to the current body of knowledge by providing the most accurate early-stage cost estimate for the concrete bridge systems in Sri Lanka. In addition, the research findings would be helpful for stakeholders and policymakers to propose policy recommendations that positively influence the prediction of the most accurate cost estimate for concrete bridge construction projects in Sri Lanka and other developing countries.

From Boom to Bust: A Study of China’s Economy in the Wake of COVID-19 Outbreak in H1 2020

The purpose of this study is to examine the impact of the COVID-19 pandemic on China in terms of both health and economic crises and to provide an in-depth analysis of the government’s economic policies in response to the crisis. To achieve this, the study analyzes data on the spread and progression of the COVID-19 pandemic in China and the data on the Chinese economy and government initiatives to stimulate economic growth. The study draws on relevant literature to contextualize the effects of past crises on the global economy. The study found that the COVID-19 pandemic had a significant impact on the Chinese economy, resulting in the first annual decline in growth since 1976. The government’s response to the crisis focused on job security rather than economic growth. The study also revealed that the government implemented various measures to stimulate the economy, such as tax relief, loans to small and medium-sized enterprises, and investments in infrastructure projects. The study provides insight into the effectiveness of the government’s economic policies in response to the crisis and offers important scientific findings on the impact of the COVID-19 pandemic on China’s economy and public health. The study highlights the challenges faced by China in responding to the crisis and provides valuable lessons for other countries. The study’s contribution lies in its thorough analysis of the Chinese case and its potential to serve as a model for other economies in the post-pandemic era.

Compound deferrable options for the valuation of multi-stage infrastructure investment projects

Multi-stage planning is common for expanding infrastructure complexes or networks. Previous real-option studies developed a sequential compound call option (SCCO) for evaluating multi-stage infrastructure investment projects, including evaluating abandonment options during individual pre-scheduled investment stages. In practice, however, investment schedules involve risk and uncertainties forcing investors to change plans, raising an important issue regarding investors having more options at each commencement date. This study introduces a new model, the sequential compound deferrable call option (SCDCO), incorporating deferment options for each fold in an n-fold setting and generalizing the exercise of each deferment option into mn periods. A closed-form solution to the valuation of SCDCO is derived accordingly. A real-world case demonstrates that introducing deferment options increases project value, but the marginal benefit of increasing deferment time diminishes. The presence of dedicated assets for the usage of future expansions can also increase project value, but this increase is restricted by deferment options. Furthermore, the investment cost growth with an increase of deferment time rapidly decreases project value and vice versa. Inflation or deflation is therefore important to consider in deferment decisions. Finally, although deferment options only produce limited project value, they have the flexibility to manage risks, changes, and budgetary constraints.

The Efficiency of Energy Infrastructure Investment and Its Regional Economic Impact.

This study constructed an input-output and environmental indicator combination framework to evaluate the efficiency of energy infrastructure investment. Furthermore, the study used a three-stage DEA model to evaluate the efficiency of energy infrastructure investment projects in Jiangsu Province. Subsequently, the study constructed a system of indicators to measure regional economic development and assigns weights to them using the entropy value method, to obtain a comprehensive regional economic development score. Finally, this study analyzed the impact of energy investment efficiency on regional economic growth, economic stability, and industrial structure optimization. The study results show that the efficiency of energy infrastructure investment varies widely across Jiangsu and is highly correlated with the regional economic development model, the level of economic development, and the importance of the industry. The study also reveals that the improvement of energy infrastructure investment efficiency in Jiangsu fails to reflect the level of regional economic development; however, it has a crucial role in increasing social wealth and transforming the regional industrial structure and economy. Based on these results, this study further proposes countermeasures, such as planning a reasonable scale of investment, implementing differentiated regional investment, and upgrading management and technology.

India’s soft power diplomacy in West Asia

India’s soft power in West Asia has been shaped by a combination of cultural, historical, economic, and political factors. India’s cultural influence can be seen through the popularity of Bollywood movies, music, dance, and cuisine in the region. Historical ties between India and West Asia date back to ancient times, with trade and cultural exchanges being recorded as early as the 1st millennium BCE. India’s economic ties with West Asia have been strengthened through the import of crude oil, the presence of Indian IT companies, and investments in infrastructure projects. India’s non-alignment policy and involvement in peacekeeping efforts in the region have also contributed to its positive image in the region. Overall, India’s soft power in West Asia has helped establish it as a reliable partner and a source of inspiration for many in the region.

Investiranje u ciljeve održivog razvoja i ESG izveštavanje - računovodstvena perspektiva

There are less than ten years left to achieve the goals set out in the 2030 Agenda for Sustainable Development. However, it seems that the remaining work on their implementation will take far more time than expected. This is particularly the case in developing countries which face difficulties in providing the necessary sources of finance for the acquisition of new technologies, investment in infrastructure projects, and the development of cleaner and environmentally-friendly production. Objective circumstances, such as the COVID-19 pandemic, the war in Europe and the subsequent energy crisis, have further slowed down these processes, threatening to undo the positive developments in the implementation of the sustainable development goals. Despite a significant progress made in the field of transparent reporting aimed at supporting the achievement of sustainable development goals, our impression is that a great number of different institutions have invested efforts to make a step forward in this domain, but due to the lack of globally coordinated activities, we are still far from a universal conceptual framework. That path is paved with numerous challenges. First, a high-quality conceptual framework must be compliant with the sustainable development goals to be able to track the global progress in their achievement, which requires an adequate system of performance measurement and monitoring at the global level. Second, the operationalization of sustainable development goals, recognized at the global level, must be followed by the adoption of compatible reporting at the corporate level, bearing in mind that companies are actually most responsible for local and planetary problems. The risks arising from inadequate performance measurement at the corporate level are far from being negligible. They are related to the efficiency in channeling limited capital toward the sectors and companies where it will be possible to produce the most beneficial environmental effects. At the same time, there is a risk of potential abuse with regard to the disclosure of good news or the cover-up of bad news, which casts doubt on the accuracy of information on the progress in achieving the SDGs, increasing risks of the misallocation of resources. In this paper, we investigate the complexity of aligning corporate reporting with the requirements imposed by the SDGs.

Cost management as a key component of the organizational system of a developer implementing a unique nuclear industry infrastructure project abroad

The COVID-19 pandemic and the global economic crisis did not lead to a collapse in the volume of construction work in the country and abroad, as well as a decrease in investment in infrastructure projects. However, the labor force was negatively affected (both quantitatively and qualitatively), industry prices, supply chains and the stability of companies. The low profi tability of the Russian sector of construction of infrastructure projects remains unattractive for capital investment by businesses and investment funds, and therefore, private companies have been selling their construction assets to state-owned companies or monopolies for 5 years (from 2018–2022). Also, for the participants in the implementation of infrastructure projects, the most serious problems remain imperfections in the public procurement system and the formation of project costs, an outdated pricing model, high cost and limited availability of loans, as well as the inability to plan their load for a long time. Almost all of these problems are somehow interconnected with each other, and they need to be addressed with the help of systemic transformations. Even if a large amount of funds is directed to infrastructure projects, it will only postpone the need for systemic changes in the industry in general and organizational changes at the level of the developer in particular. To solve the stated problem, the subject area of the study is defi ned: the subject of the research: the process of organizing the cost management of an infrastructure project of the nuclear industry abroad; the aim of the research: creation of a scheme of the developer’s organizational process for managing the cost of construction of an infrastructure project of the nuclear industry (IPAO) abroad; research objectives: develop a methodological approach to substantiate each stage of the implementation of a unique infrastructure project of the nuclear industry in terms of the processes of formation, calculation, approval, control and monitoring of cost; develop proposals for improving the cost management process by the customer when implementing a unique infrastructure project for the nuclear industry abroad. Research methods: analysis and synthesis, graphic modeling, comparative estimates; research results: the created scheme of the developer’s organizational process for managing the cost of construction of an infrastructure project of the nuclear industry (IPAO) abroad at the stages of project implementation, taking into account the process approach and refl ecting the responsibility of counterparties at each stage of the life cycle. Scope of application of the results: the introduction of the organizational process scheme into the activities of companies implementing infrastructure projects abroad will allow regulating and standardizing cash fl ow processes, as well as identifying deviation parameters of the established cost throughout the life cycle of the infrastructure project.

Cost Underruns in Major Road Transport Infrastructure Projects—The Surprising Experience of Poland

This paper investigates the reasons behind the surprising cost performance of road construction projects in Poland. In particular, in order to explain the phenomenon of cost underruns, the role of regulations related to the national and the European Union structural investment funding is verified. It is shown that in Poland there exist two different institutional frameworks related to infrastructure investment projects. However, in the case of road transport infrastructure investment, the public investor does not discriminate between the sources of funding and follows the optimal strategy for the EU co-funded projects. This, in turn, leads to the emergence of cost underruns.

Real options approach: Case study applied to a nursery to produce Eucalyptus forest seedlings in Brazil

Aim of study: We checked if an infrastructure investment project for a nursery to produce Eucalyptus forest seedlings using the real options approach was economically viable, in order to verify the influence of the deferral, expansion and abandonment options on the investment project value, as well as their concatenation.
 Area of study: Our study was based on technical-economic coefficients of a nursery infrastructure to be installed in the São Paulo’s state Midwest region, Brazil.
 Material and methods: The investment was assessed by addressing the uncertainties inherent in the investment project. We used the dynamic model for real option approach and, to determine the volatility of the project, we applied the Monte Carlo simulation method. As real options for the project, we employed deferral, expansion, and abandonment.
 Main results: Using the traditional valuation methodology, we obtained a negative static net present value of USD 50,957. When incorporating the real options of the abandonment, deferral and expansion in the form of managerial flexibility to forest managers, we obtained the expanded net present value of USD 216,498, that is, 524.8% of valuation. The traditional method of investment evaluation undervalues the project in infrastructures to produce Eucalyptus forest seedlings nursery, and the increase in managerial flexibility, through the real options for deferral, expansion and abandonment, promotes value to forest managers and enables the feasibility of the project.
 Research highlights: Infrastructure investment project for a nursery to produce Eucalyptus forest seedlings is not economically viable through the traditional economic evaluation techniques. However, by incorporating managerial flexibilities, through real options, the investment project was valued and it became economically viable.

How free trade agreement affects the success of China's Belt and Road infrastructure projects

AbstractAfter China launched the Belt and Road Initiative in 2013, the Chinese government has invested over 1200 infrastructure projects in countries along the Belt and Road, and nearly 10% of the projects have failed or been delayed. China has also concluded free trade agreements with many countries along the Belt and Road to reduce trade and investment barriers to promote economic and trade cooperation. This paper analyzes whether the signing of the free trade agreement (FTA) is conducive to promoting China's infrastructure investment projects’ success in the countries along the Belt and Road. We conclude that the signing of the FTA agreement is conducive to reducing the failure rate of China's infrastructure investment in the countries along the Belt and Road. For deeper FTAs, the effect is more pronounced. This paper further explores the investment provision of FTA and concludes that investment provision can improve the success rate of investment, especially if it includes provision of national treatment in the pre‐establishment and the dispute settlement mechanism.

Features of the assessment of socio-economic effects arising from the construction of lines of freight maglev transport

Background: Transport is a sector of the economy that is subject to general economic laws, including with regard to issues related to investing in real assets, developing means of production, and ensuring expanded reproduction. Along with this, transport is a strategic sector at the state level, ensuring the functioning of the economy as a whole. In this regard, there are certain contradictions associated with the assessment of the effectiveness of investments in transport infrastructure. In most cases, investments in transport infrastructure are valued similarly to investments in a business project. After the issuance of Decree of the Government of the Russian Federation No. 1512 dated November 26, 2019, the approach to evaluating the effectiveness of investments with state participation has expanded, but it does not fully cover the issues of project effectiveness for the state. Along with this, the classical methods for evaluating the effectiveness of investment projects are subject to great subjectivity in relation to the calculation of social effects, as a result of which their applicability to projects at the national economic level is ineffective.
 Aim: to consider the list of effects arising from the construction of transport infrastructure and determine the methodology for calculating the effects for the state.
 Materials and methods: the research methodology is based on the analysis of methods for financial and economic evaluation of investment projects, as well as macroeconomic methods. The information base of the study is based on the official legal and methodological information of the authorities of the Russian Federation.
 Results: as a result of the study, a list of effects for the state arising from the implementation of transport infrastructure development projects was determined, and the procedure for their calculation was substantiated.
 Conclusion: the study confirms that the currently used methods for evaluating the effectiveness of investments in infrastructure projects for the state do not fully and objectively reflect economic realities. The proposed approach to the assessment will make it possible to carry out a comprehensive assessment of the socio-economic effects from the construction of cargo maglev transport lines and improve the quality of management decisions in the transport sector.

Research on competitiveness of Nghi Son Economic Zone in Thanh Hoa and some raised issues

Competitiveness plays an important role in the efficiency and productivity of the Economic zone. The research analyzed the current state of competitiveness of Nghi Son economic zone, Thanh Hoa province, by means of analysis, synthesis, statistics and comparison based on the data source of Nghi Son economic zone management board. After screening and processing, the following results are obtained: (i) Competition at the enterprise level: foreign-invested enterprises act in a small number of projects but account for 73.68 of total investment capital. The number of assembly, processing and processing projects in the economic zone accounts for a large proportion, of which petrochemical and chemical industry projects take two-thirds of the registered capital, lack of the presence of other industries; (ii) Competition at the local level: Infrastructure investment projects are mobilized from central capital and socialized to build relatively synchronous and complete hard and soft infrastructure; living environment and investment support services to meet practical needs. (iii); Availability factors in the economic zone: the favorable geographical location and abundant natural resources are the factors that create the competitiveness of the economic zone. However, the problem of Nghi Son Economic Zone is that there are still some limitations that need to be overcome to improve competitiveness in the coming time.

News Discourse on CPEC and Challenges for Civil-Military Relations

The China-Pakistan Economic Corridor (CPEC), a multi billion-dollar infrastructure investment project, is heralded as a game-changer for sustainable development and democratic consolidation in Pakistan. However, the implementation of such a mega project came with a lot of challenges. Among all, the major challenges were balanced civil-military relations, peace, and revised policy with Afghanistan. The objective of the current paper is to examine the coverage of CPEC in the news stories of two English newspapers of Pakistan i.e., Dawn and The News, in the context of civil-military relations. The study incorporated a method of discourse analysis for examining style, slant, themes, and discourses. Results revealed that both the newspapers remained positive in their slants.Moreover, both newspapers appreciated the efforts of COAS not only for protecting mega project but also for bringing peace to the region. Both newspapers also appreciated that the civilian government and military were on the same page for over coming security challenges effectively.

Трансформация мер государственной политики поддержки экономики стран Северо-Восточной Азии во время пандемии COVID-19: 2022 г.

The review provides an analysis of government policy measures to support the economy in the North-East Asia countries during the COVID-19 pandemic, implemented in 2022 in the face of increasing external risks. It is shown that the internal political processes in the PRC determined the continued implementation of the «zero-COVID» strategy in 2022. It was determined that many measures to stabilize the Chinese economy in 2022 are a continuation of the measures of 2020-2021, for instance state investments in infrastructure projects and social spending. The new measures in the policy of the PRC in 2022 are including: ensuring economic security, stimulating employment for young people, stabilizing regional budgets and the real estate market. The structural problems of the Japanese economy have become significant constraints on the measures taken by government stimulus policy, even in the face of broad political supporting. For this reason, in 2022 the main changes in the measures of government stimulus policy for the Japanese economy were associated with transformations in the labor market and smoothing prices for basic goods. Along with this, the Japanese leadership has been raising capital in digital and green technologies in 2022 to stimulate long-term economic growth. It was shown that in the first half of 2022 the government of the Republic of Korea began to overcome the negative consequences of the COVID-19 pandemic, therefore, it experienced a gradual tightening of monetary and fiscal policy and solving problems in the real estate market. In 2022, the government of the Republic of Korea began to finance programs for the development of an innovative economy, including creating a promising labor market