Financial commitments for BOT projects

Financial commitments for BOT projects

International Journal of Project Management Vol. 15, No. 2, pp. 73-78, 1997 ~Pergamon Copyright © 1997 Elsevier Science Ltd and IPMA Printed in Grea...

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International Journal of Project Management Vol. 15, No. 2, pp. 73-78, 1997

~Pergamon

Copyright © 1997 Elsevier Science Ltd and IPMA Printed in Great Britain. All rights reserved 0263-7863/97 $17.00 + 0.00

S0263-7863 (96)00033-6

Financial commitments for BOT projects Robert L K Tiong School of Civil and Structural Engineering, Nanyang Technological University, Nanyang Avenue, Singapore 639798

Jahidul Alum School of Civil and Structural Engineering, Nanyang Technological University, Singapore

This paper investigates the extent of importance of a high level of financial commitments in a B O T tender. In cases where the competition is keen and where financing is uncertain, proposals with a high level of financial commitment are more attractive to governments. This paper also presents the strategies for developing a competitive financial proposal for BOT projects. Copyright © 1997 Elsevier Science Ltd and IPMA Keywords: BOT, financial commitments, risks, tender proposal

Every promoter competing in a Build, Operate and Transfer (BOT) tender for a privatized infrastructure project has a competitive strategy, whether explicit or implicit. This strategy may have been developed explicitly through a planning process or it may have evolved implicitly through the past activities and experiences of the various partners in the bidding consortium. Successful packaging of a BOT proposal means getting all of the political, technical, commercial and financial elements of a project put together in a proposal so that adequate funds can be committed and advanced to the project company and construction can begin. Packaging therefore deals with the evaluation, promotion, development and financing aspects of proposal preparation before implementation of the project. This paper presents an analysis of the issues related to financial commitments of funds required from the lenders and promoters in a BOT tender. The issues to be investigated are: • the extent of importance of a high level of financial commitments during evaluation; and • whether the level of financial commitments provides the competitive advantage and increases the chances of success in a competitive BOT tender. Finally, the paper recommends the strategies required for developing a successful and competitive financial proposal for a BOT project.

Requirements for financial commitments This paper is concerned with the financial commitment of funds required of private promoters in a privatized infrastructure project that is let under the Build, Operate and Transfer (BOT) concept. The commitments are partly for

funds and partly for equity to supplement the promoter's equity which is normally the 'seed' capital for the development phase. These are inter-dependent in that the loan money will not be forthcoming unless a minimum level of equity is assured, and the equity will not be forthcoming unless those who are able to provide it are confident of sufficient loan monies being raised to finance the completion of the project. The financial commitments would take the form of irrevocable commitment letters such as letters of credit and are an agreement that equity and debt finance have been committed or will be available in the amounts required to assure the completion of the project. While this agreement may not necessarily be legally enforceable, most lenders will honour their commitments in the absence of any unforeseen event that may adversely affect the project's financial projections. To the lenders, this willingness to underwrite the financing of the project means an early opportunity to participate in the project, but it is also expensive for them as far as opportunity costs are concerned. The research is based on documented experiences and lessons as presented by the project promoters, government officials and their financial advisors in expert seminars and conferences on BOT projects. Information was also collected from multiple sources to improve the quality and reliability of analyses. These sources are: • Request For Proposals (RFPs)issued by governments • interviews with professionals involved in BOT projects including bankers, developers, contractors and government officials • annual reports, company and project profiles, and internal data made available by the government departments and companies 73

Financial commitments for BOT projects: R L K Tiong

• newspaper articles, articles in business magazines, journal reports, conference articles • direct correspondences with governments and promoters for specific views on the topic concerned. The research was carried out through analysis of the RFPs and then followed by studying the actual cases involved. The following issues were examined:

Issue 1: Is the requirement for financial commitment specified in the RFPs? Issue 2: Do the RFPs state that the level of financial commitments is an important criterion which the government will use in selecting proposals? To perform the analysis for the above issues, the RFPs from 10 countries for 38 BOT projects which were procured through competitive tendering were analyzed. Table 1 shows which RFP specifies the requirement of financial commitments and which RFP specifies that the level of financial commitments is an important criterion for Table 1 Requirements for financial commitments in RFPs Country

Project

Australia

F4 tolled road F5 tolled road Sydney airport link Sydney water treatment plants Loy Yang power plant, Victoria Collie power plant Victoria toll road Melbourne tolled bypass

Canada

Northumberland Strait Crossing Bridge Toronto international airport extension

Hong Kong Eastern Harbour Crossing Tate's Cairn Tunnel Western Harbour Crossing Hungary

M1 tolled road

Indonesia

Cikampek-Padalarang tollway

Malaysia

Johor water supply North-South Highway Ipoh water supply KL tolled interchanges

Philippines Hopewell's gas turbine power plant Hopewell's coal-fired power plant Manila Light Rail transit Thailand

Second Stage Expressway Third Stage Expressway BMA Light Rail Hopewell's Road/Rail Don Muang Tollway Skytrain

UK

Channel Tunnel Dartford Bridge Second Severn Bridge Skye Bridge Manchester Metrolink Birmingham Relief Road

US

Caltrans transport projects Florida High Speed Rail Texas High Speed Rail Honolulu High Speed Rail Arizona transport projects

74

Financial Requirements commitments for an important financial commitments? criterion?

Table 2 Number of RFPs and the required financial commitments Number of RFPs

Yes No Total

Requirements for financial commitments

Financial commitment as important criterion

24 14 38

1 37 38

evaluation. A summary of the results is shown in Table 2. As can be seen from Tables 1 and 2, 62 % of the RFPs (24 " n o " s ) specified the requirements while 37% did not do so. Of the 10 countries studied, the RFPs for projects in Thailand, Canada and the UK would definitely require financial commitments from the promoters. On the other hand, requirements for financial commitments are not normally specified in RFPs for projects in Australia, Hong Kong, and Malaysia. In the US, the requirement differs from project to project. Promoters must, however, be aware that financial commitments are often included in negotiations. Strong financial commitment was specified as an important criterion only in the RFP for the Channel Fixed Link project.

W h e r e level o f financial c o m m i t m e n t s is specified as i m p o r t a n t in R F P - - t h e C h a n n e l Fixed Link, U K In the Invitation To Promoters issued in 1985 by the UK/French governments 2, it is stated in Section 34.3: The standing of financial institutions making commitments, the amounts of those commitments (which should represent a substantial part of the project cost) and the nature of any conditions attaching to them will be essential criteria which the Governments will use in selecting proposals. The Governments will place importance on the extent to which the promoters are prepared to commit their own financial resources.

The RFP thus clearly stated the importance of the level of financial commitments for evaluation. Given this requirement, the issue that needs to be addressed is whether financial commitment actually constituted one of the main evaluation criteria as specified in the RFP. For this project, the financial commitment did constitute one of the main evaluation criteria as specified in the RFP. This is evidenced in the White Paper 3 published by the governments which set out the reasons for the selection. It stated that the governments, in evaluating the proposals, were looking for "evidence of unconditional (financial) commitments (by the promoters) on which a more conclusive judgement of the relative financeability of the schemes could have been based." The White Paper also stated that all four shortlisted promoters presented financial information in their proposals. Three of the promoters--CTG-FM, Euroroute and Channel Expressway--produced documentary evidence of support from banks and other financial institutions. CTG-FM and Euroroute presented fully worked-up financial packages and Expressway did so to a lesser degree. All the promoters expressed confidence that the sums required could be obtained, but they differed in their degree of commitments or interest by potential investors. The differences are as follows:

(i)

CTG-FM offered the strongest financial commitments of the three. While the commitments fell short of binding undertakings, they covered the full capital sums required, i.e. the whole of the financing required 4. CTG stated in their proposal that assurances had been

Financial commitments for BOT projects: R L K Tiong given by investing institutions regarding the availability of adequate equity to meet their plan on the basis of the economics and characteristics of their proposed project. For bank loans, CTG said that a group of over 50 international banks had together already given commitments, not just expressions of interest, in respect of substantially all of the bank finance needed. (ii) The undertakings by Euroroute, C T G ' s closest rival, were less strong. Although it has substantial backing by construction companies, the governments viewed that its scheme could be more difficult than CTG in raising all the necessary finance. (iii) Channel Expressway's financial proposal was essentially expressions of interest, and not commitments. According to the governments, it had correspondingly greater uncertainty when compared to CTG as far as the willingness of investors to back it was concerned. (iv) Eurobridge's proposal did not comprise detailed financial plans with identified bankers. There was no indication of amount of equity and the financial structure and the promoters expected the bank finance to account for the major proportion of debt required. In terms of equity commitment, the competition for the Channel Fixed Link project caused the promoters to propose a high equity in their financial plans and the levels of equity were close. However, the level of financial commitments and the financial plans were vastly different for the four shortlisted promoters. The one with the strongest commitments, the CTG-FM group, was judged to be the most likely to attract the necessary finance. The level of financial commitments was therefore important as the governments know that the lenders must have thoroughly researched and analyzed rigorously the financial viability of the project before they would even commit their funds. It is therefore an important criterion for evaluation in the Channel Tunnel project. And where level of financial commitment is stated as important criterion, a high level of financial commitment is very necessary and must be included in the proposal as far as winning the concession is concerned.

Where level of financial commitments is not specified in the RFPs For cases where the level of financial commitments is not specified in the RFPs, a project-by-project analysis showed that financial commitments could still be included by some governments as part of the negotiations. The projects can be grouped into three categories: Category I includes those projects where the governments demanded strong financial commitments by the promoters during negotiations. These are the projects where the financing is perceived to be uncertain and where competition for the project has shown to be keen. Projects in this category would include Canada's Northumberland Straits Crossing, Hong Kong's projects, Thailand's projects, and the US's Texas and Florida high speed rail projects. Category 2 includes those projects where the governments did not demand strong financial commitments during negotiations, either due to government policy of encouraging BOT projects, or due to good project economics where the government is confident of the support of the financial markets. The governments would give letters of intent and some would even award the concession after a thorough discussion of the financial plan. They would then give the private promoters an exclusive period to raise the finance

and realise the financial plan. Projects in this category include those in Australia, Malaysia, Philippines, Pakistan, Indonesia as well as the three U K ' s bridge crossings and Caltrans' projects in US. In Category 3 the financial plan is enough to the government as long as the project is feasible and projections robust. This relates mostly to the privately-initiated proposals which are exclusively negotiated with the government. Projects in this category would include the Sydney Harbour tunnel, IPCO's project in Labuan and Hopewell's Shajiao 'B' power plant.

Category 1: where strong commitments are required (a) Hong Kong's projects. In Hong Kong, financial commitments were regarded by the government as an important factor during the negotiations with the promoters because of political reasons. This is because Hong Kong will be handed over to China after 1997 and the repayments of foreign loans would extend past that date. Financing was regarded as uncertain as these are the first major privatized projects and the government wanted strong financial commitments to be provided. In the Eastern Harbour Crossing, Kumagai brought in China International Trust and Investment Corporation (CITIC), while in the Tate's Cairn project, Nishimatshu brought in China Resources to their consortia. Both are investment companies linked to the Chinese Government and acted as the stabilizing factor for the financial community. The competition was strong and both projects were perceived by the promoters as prestigious to undertake. As a result, the debts were 100% underwritten by the bankers during the negotiations. (b) Thailand's projects. In Thailand, the competition of the Skytrain project caused the local and foreign-based bankers to give their 100% commitment to the schemes that they supported. (c) The US's projects. In the US, finance was a hotly discussed topic during negotiations, particularly for the Texas and Florida High Speed Rail projects. It was a Catch 22 situation. For both projects, the governments had declared that there would not be any State funds and that they required the promoters to provide financial commitments as assurances that the finance could be raised. The promoters on the other hand were not able to provide the commitments as the lenders were cautious and unsure of the viability of the projects without State funds. The focus during negotiations was therefore on the techniques to raise revenues rather than on financial commitments due to the lack of interest of lenders and investors in financing the project. Both projects were first-ever, mammoth privatized projects in the US. The shortfall of revenues in the early years and the refusal by governments to provide any state funding were main factors that caused the inability of the promoters to provide the necessary financial commitments both during the tendering stage and even after the concession was awarded. Category 2: where strong financial commitments are not required (a) Australia's projects. In Australia, financial commitments are not important and are not even specified in the RFPs. This is because the government makes it clear that all the risks would be passed over to the promoters and it is up to the promoters to propose viable proposals and raise the necessary finance. 75

Financial commitments for BOT projects: R L K 71ong (b) Malaysia's projects. In Malaysia, financial commitments are not important as the government officially supports BOT projects. They encourage foreign promoters to form a joint venture with the local construction companies to initiate unsolicited proposals or to bid in competitive tender. If the proposals are viable, the sole promoter would be given an exclusive period for negotiations with the government and for raising the necessary finance. In countries such as the Philippines, Indonesia and Pakistan, the governments have adopted similar policies. (c) The UK's projects. In the UK, apart from the Channel tunnel project, financial commitments were not important in the other BOT projects as the government was confident of the viability of the projects. The projects are esturial crossings and are quasi-monopolistic in nature. (d) Caltrans 'projects, US. The four Caltrans projects were chosen from eight shortlisted proposals and the selection took into consideration their financial plans. The promoters were free to choose their own routes and they worked together with their technical and financial advisors to choose the routes that have robust traffic projections and are economically viable. The successful promoters were therefore strongly backed by the bankers, even though Caltrans did not demand strong financial commitments.

Pre-investment studies In developing a proposal for a major privatized infrastructure project, large capital commitments are required not only during the construction stage, but also during the preinvestment studies. The proposal must portray to the government that the promoter is in the state of readiness to perform. This often requires mounting a substantial effort in advancing the baseline design to a point which permits the clear definition of the project in terms of technical feasibility, commercial viability and project financeability. The engineering, economic and financial feasibility studies must be extensively carried out to determine the viability of the project. The project scope would be drafted and the specific construction technology to meet the need, identified. At this point the project promoter must verify, identify, and establish the reliability of the earning potential of the project. At the same time, the project criteria should be established and funding sources for debt and equity identified. This is part of the development process for a quality tender proposal. There is a need to establish enhanced credibility for the BOT project at this stage because the project will have to be financed in the private financial or capital market, locally or overseas, without the traditional government repayment guarantees. In putting together a superior BOT proposal, it is essential that the pre-investment studies be as credible as possible because ultimately the financial market will judge the project on its own merits and not simply because the government decreed that the project be developed 5. These advance developments are expensive, have no guarantee of any returns and preclude the company from pursuing other projects. But they are often a necessary part of winning the BOT concession and the promoter cannot hope to wait for the concession award before they engage in any serious studies. Such studies reduce the implementation risks to an acceptable level for both the government and the promoter. Further, these developments might be necessary to catch up with a competitor, or to convince the government that 76

certain alternative approaches are feasible. Thus, though these studies are called preliminary, they have to be done in sufficient details to enable an offer to be made to the government and which, if accepted, can form the basis of the finally agreed Concession Agreement.

Risk analysis It is vital in pre-investment studies to complete a thorough, sophisticated assessment of the risks involved in the project. Failure to do this will mean that the project will inevitably fail because it will be found that some risks are simply of an unacceptable level and which, if identified sooner, could have been eliminated or re-allocated contractually to another party. The risks are typically in three areas 6: • Project Risks: these risks would include the technical and financing risks such as completion risks, operating risks, demand risks, payment risks, interest risks and inflation. • Country Risks: these refer to the economic stability, political will to succeed and whether the legislative judicial process is in place to support the project. • Client's Risks: these include the credit-worthiness of the contract-paying agent and the acceptance by the agent of the privately-funded BOT concept of privatizing the infrastructure project. In some countries, the local utilities are in poor financial and credit-standing. Their guarantees of electricity or water purchases would therefore be of no value in a BOT project finance.

Developing a competitive financial proposal The project financing package should be carefully tailored to the characteristics of the project, objectives of the government and of the project participants. An attractive financial package must be based on the principles of low capital cost, low operation and maintenance cost, credibility, minimal financial risks to the government, and minimal burden on debt-servicing capacity of project revenues. These can be achieved through maximizing long term project debt, maximizing fixed-rate financing at low interest rates, and minimizing re-financing risk 7. Other aspects in a financial package that need consideration are minimization of interest during construction, foreign exchange risks, and special legal, tax and accounting requirements. Indeed attempts must be made to develop innovations in the financing package to precisely suit the project circumstances and to improve the viability of the project. This will reduce the need for costly restructuring and refinancing in the future. The three key areas of developing a successful and competitive financial proposal for BOT projects are shown in Figure 1 and are described below:

1. Developing the financial framework and the financing plan The first step is to develop the financial framework and the financing plan. This requires a thorough financial feasibility study which would include establishing the financial criteria, a review of sources of finance, debt and equity, and preliminary cost and revenue estimates. Computer models must be developed and sensitivity analyses carried out as well as an assessment of returns on equity and cover for debt service to meet lenders' financial ratio requirements and investors' returns. The traffic studies must be thoroughly analyzed to ensure the robustness of future cash

Financial commitments for BOT projects: R L K Tiong

Develop financial framework and financing plan

:1

Analysis of contractual structure and financial risks

Jr

Formulation of financial strategies

l Formalization of revenue sources

• Seek most competitive financing sources

• Revenue projections

Evaluation of debt and equity structure

• Cashflow analysis

Risk-sharing structure

• Examine alternative debt/equity financing strategies and maximize financing advantages

• Financial model

Limits to risk acceptance

• Establish financial criteria • Capex and Opex

Financial risk and sensitivity analysis

_1 v[

Financial Proposal

• Minimize capital investment/financing costs and financial risks • Maximize long-term debt

Establish financability thresholds of lenders and investors

• Maximize fixed-rate financing

Realistic security package

• Minimize re-financing risks

Figure 1 Development of competitive BOT financial proposal flows. The terms of the pricing structure and the concession life, combined with various projected demand, and operating cost scenarios, will in turn, yield the BOT concession's debt coverage ratio (DCR). The DCR ratio is defined as the number of times a project's anticipated cash flow attributable to debt service through the debt's projected maturity, when discounted to that point in time where project debt is highest, may cover that debt. It is a measurement by which project finance lenders assess the risk that a given BOT concession may not be able to reimburse its undertaken debt. The level of this ratio depends upon the level of uncertainty that is assigned to the potential returns. If a project DCR is too low or below expectations, project finance lenders may require from project promoters a higher level of equity injection than initially anticipated or that they inject a layer of subordinated debt or redeemable preferred shares into the project structure 8.

2. Analysis of contractual structure and financial risks Next, an analysis of the contractual structure and financial risks associated with the project must be carried out. This requires formalization of revenue sources, for example off-take contract or structures of toll levels. The key features of the security package, construction contract, cost overrun funds, insurance, operations and management contract must be outlined. The foreign exchange availability and convertibility must be examined. The risks must be specified and evaluated. A financing and risk-sharing structure within the resources of the promoting group must be developed. Advice on financing and tender strategy in competitive situations must be sought from competent financial advisors. Such an analysis will put the promoter in good stead in structuring the project credit structure to meet the lenders' requirements and in structuring the risk/reward profiles during the final negotiations with the government.

3. Formulation of financial strategies The objectives to be achieved at this stage in the structuring of a competitive financial proposal are to maximize long term project debt, maximize fixed-rate financing, and to minimize re-financing risk. An important strategy at this stage is to seek and evaluate the most competitive financing sources. This requires the utilization of world-wide knowledge and experience and investment criteria of major banks and investors involved in successful financing to examine and tap alternative debt and equity financing sources so that the most competitive finance possible can be recommended and so that the financing costs can be reduced. As such, the BOT approach to contracting is, in most cases, limited to consortia led by leading international constructors or developers. The promoter should at this stage also seek to minimize capital investment costs through procurement of lowest allin cost of capital goods and through phased project construction so that the capital injection is staggered and financial indicators such as the Net Present Value and Internal Rate of Return are improved. In the case of the M$700 million water privatization project in Johor, Malaysia, the final compromise during the negotiation was that construction phasing would be done in three stages, with the timing of the third stage being linked to actual levels of treated water demand in the Concession area 8. The possible sources of finance and the strategies to analyse them are as follows: • Bank debt: evaluate the policy of banks on loan maturity, margin, currency, cover factors, country risk, credit risk and identify interested banks. • Export credit and concessionary finance: review cost advantage, country availability (sovereign/private sector), project risk-taking capacity, aid availability and trading houses' 'own finance' packages. • Multilateral agencies: analyse specific investment criteria of the agencies. Review co-financing and specialized 77

Financial commitments f o r B O T projects: R L K Tiong

schemes such as the Enhanced Co-Financing scheme of the World Bank which has been put to use in the Hub River power plant project in Pakistan. • Capital markets, debt/equity swaps: consider sources of fixed rate finance (possibly under guarantee syndicate), mezzanine finance, debt/equity conversion (discount availability). Assess the local capital markets for debt and access costs. • Equity investors: assess feasibility of private placement or public issue in local or international equity markets. Consider multilateral agencies or national investment banks as equity investors. The Asian Development Bank and International Finance Corporation have taken the lead and have invested in several BOT projects in Asia. • Bond finance: evaluate the use of long term inflationindexed bonds at a rate consistent with current market conditions and which matches the debt servicing costs to the revenue stream of the project. This instrument was successfully utilized for the Sydney Harbour tunnel project and is currently being considered for a number of BOT projects in the region.

Conclusion Financial commitments, unlike equity, cannot be simply offered by the promoters because the commitments have to come from lenders and investors who will scrutinize the project's viability. The lenders and investors will not provide the financial commitments if the proposal is not commercially viable and the promoters will not risk if they could not deliver competitive technical solution in the tender. For cases where the level of financial commitments is not specified in the RFPs, a high level of financial commitments is necessary under the conditions where the financing is uncertain and where the competition and negotiations are keen. Lenders will provide different level of financial commitments in the proposals. Those proposals with higher level of financial commitments are more attractive to the governments and therefore are more likely to win the concessions. The process of promoting BOT projects to the host government is a time-consuming and expensive business. The negotiations are extensive and the financial risk of losing the tender is high. The promoter must be willing to take calculated risks, be flexible in their attitudes and stance, and their financial proposal must be adaptable to changing demands by the government during negotiation. This paper specifically analyses the strategies required for the development of a competitive financial proposal for BOT projects. The promoter must concentrate on three key areas in the process and these are: (a) developing the financial framework and the financing plan; (b) analysis of the contractual structure and financial risks; and (c) formulation of financial strategies. The objectives that must be achieved in the structuring of a competitive financial proposal are the maximization of long term project debt, maximization of fixed-rate financing, and minimization of re-financing risk. References Ferrigno, F W 'The successful packaging of BOT Projects: some lessons learned' Public Works Financing, New Jersey, US (1990)

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2 'Invitation to promoters for the development, financing, construction and operation of a Channel Fixed Link between France and the UK' Department of Transport, UK (1985) 3 'The Channel Fixed Link White Paper' HMSO Cmnd 9735, UK (1986) 4 Neal, J 'Case study on Channel Tunnel' Seminar on Financial Packaging for Contractors in International Markets, Contractors Association, Singapore (1988) 5 Chandler, A 'A BOT deal--how it all fits together.' Conference on Financing and Managing BOT projects, Bangkok, Thailand (1989) 6 Rabinowe, D 'Case study on the Sabah's Labuan Water Supply and Labuan Electricity Supply Projects' Lecture at MSc Program in International Construction Management, Nanyang Technological University, Singapore (1992) 7 Tiong, L K R 'Structuring of loan packages for international constrnction projects' Journal of Institution of Engineers 42 28-34 (1988) 8 Issen, R 'The Johor Water Privatization Project' Lecture at MSc Program in International Construction Management, Nanyang Technological University, Singapore (1992)

Bibliography 1 'Franchise application to finance, construct, operate and maintain a high speed rail facility in Texas' Texas FasTrac, Inc. Texas, USA (1991) 2 'Guidelines for conceptual project proposals for toll revenue transportation projects' California Department of Transportation, California, USA (1990) 3 'Guidelines for private sector participation in infrastructure provision' New South Wales, Australia (1990) 4 'Information on the 700MW Shajiao 'B' Power Station, Guangdong Province, China' Hopewell Holdings, Hong Kong (1988) 5 'Overview of the financial proposals for the Florida High Speed Rail and MAGLEV Transportation Systems' Florida High Speed Rail Transportation Commission, Florida, USA (1991) 6 'Project brief for Eastern Harbour Crossing, Hong Kong' Highways Department, Hong Kong (1986) 7 'Project brief for Tate's Cairn Tunnel, Hong Kong' Highways Department, Hong Kong (1987) 8 'Request for proposals for Texas High Speed Rail Project' Texas High Speed Rail Authority, Texas, USA (1990) 9 'Revised terms of reference for submission of investment for mass rapid transit system in Bangkok, Part I, Stage I' Expressway and Rapid Transit Authority, Thailand (1987) 10 "Revised terms of reference for submission of investment proposal for second stage expressway system in Greater Bangkok Project' Expressway and Rapid Transit Authority, Thailand (1987) 11 'The concession agreement--The Channel Fixed Link' HMSO Cmnd 9769, UK (1986) 12 'Western Harbour Crossing--information booklet for prospective tenderers' Transport Branch, Government of Hong Kong (1992) Robert Tiong is Senior Lecturer and Coordinator of the MSc (International Construction Management) Programme at the Centre for Advanced Construction Studies, Nanyang Technological University. Dr 7~ong earned his civil engineering degree at the University of Glasgow, his MEng at University of California at Berkeley and his PhD from NTU. His research interests focus on the financing of construction projects, in particular the use of Build, Operate and Transfer contractual arrangements. He has published several papers and a monograph and has been a frequent speaker on the subject.

Professor Alum is an Associate Professor in the School of Civil and Structural Engineering, Nanyang Technological University, Singapore and isformer Director of the Centre for Advanced Construction Studies in NTU. He has more than 35 years of practical and academic experience in his areas of specialization of construction technology and project management. He has contributed many papers to various international conferences and journals and is actively involved in research and consultancy related to his areas of specialization.