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Multi-Objective Optimization Of Build-Operate-Transfer (BOT) Tender Problem For Private Sector Companies

Author

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  • Elif Acar
  • Hasan Durucasu

Abstract

Today, around the world, Build-Operate-Transfer (BOT) project finance model is used frequently in numerous projects. One key aspect to the success of project company who wishing to gain BOT tender is to prepare a financial package consistent with the expectations of the related participants in accordance with BOT contract. The debt to equity ratio, the concession length and the unit prices are the important financial decision variables to be determined by the project company. The objective of this paper is to present financial optimization model including two different procurement objectives; (1) potential of winning a BOT project and (2) potential of finding debt. The optimization model solved by multi-objective evolutionary algorithm generate a set of pareto solutions to help project company assess the trade-offs between the two competing objectives. To show application of the model, a real airport YİD project in Turkey study is conducted.

Suggested Citation

  • Elif Acar & Hasan Durucasu, 2014. "Multi-Objective Optimization Of Build-Operate-Transfer (BOT) Tender Problem For Private Sector Companies," Alphanumeric Journal, Bahadir Fatih Yildirim, vol. 2(2), pages 37-50, December.
    • Handle: RePEc:anm:alpnmr:v:2:y:2014:i:2:p:37-50
    DOI: http://dx.doi.org/10.17093/aj.2014.2.2.5000083954
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    More about this item

    Keywords

    Build Operate Transfer; Evolutionary Algorithm; Financial Optimization; Multi-Objective Model; Pareto-optimal;
    All these keywords.

    JEL classification:

    • C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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