Negotiation-based risk management for PPP-BOT infrastructure projects

This thesis proposes a systematic negotiation mechanism for PPP-BOT infrastructure project based on the game theory, hybrid simulation and real options valuation. Firstly, this mechanism helps to determine each party's negotiation position and corresponding payoff through fuzzy game theory approach especially in the development phase. Secondly, the proposed fuzzy randomness Monte Carlo simulation technique helps both parties to incorporate risk and uncertainty in the simulation simultaneously. Its results lead to well defined negotiation bound (bargaining interval) of decision variables i.e. Financial and contractual negotiation parameters which are called negotiable concession items and its associated cumulative distribution functions corresponding to specific confidence level for simulation output. Finally, the financial viability of PPP-BOT project was assessed. The real options mechanism was proposed to retain the project financial viability at an acceptable level by all parties.