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Optimizing Concession Agreement Terms and Conditions: Stakeholder Interest Alignment in the Petrochemical Sector

Author

Listed:
  • Tatyana Ponomarenko

    (Organization and Management Department, Saint Petersburg Mining University, 199106 Saint Petersburg, Russia)

  • Ilya Gorbatyuk

    (Organization and Management Department, Saint Petersburg Mining University, 199106 Saint Petersburg, Russia)

  • Sergey Galevskiy

    (Organization and Management Department, Saint Petersburg Mining University, 199106 Saint Petersburg, Russia)

  • Evgenii Marin

    (Organization and Management Department, Saint Petersburg Mining University, 199106 Saint Petersburg, Russia)

Abstract

This article is devoted to the examination of models and the selection of optimal parameters for concession agreements pertaining to construction and operation projects within the pipeline infrastructure of the petrochemical sector. Pipelines are underscored as capital-intensive assets crucial for the organization of complex petrochemical production processes. These processes play a vital role in generating added value, tax revenue, employment opportunities, and fostering territorial development while upholding environmental quality standards. This study aims to ascertain the economic parameters of concession agreements, with a focus on achieving a balance of economic interests between the government and businesses. Through a comparative analysis of fundamental economic and mathematical models of concession agreements, the authors model economic parameters to determine the government’s share in investments and concession fees concerning pipeline projects. Subsequently, an oil product pipeline project is discussed as a case study. The results gleaned from this analysis can be harnessed to optimize the parameters of concession agreements and enhance the economic efficiency of project implementation. Economically viable parameters not only facilitate the execution of concession agreements but also foster the generation of added value, social benefits, and environmental oversight, thus aligning with the principles of sustainable development.

Suggested Citation

  • Tatyana Ponomarenko & Ilya Gorbatyuk & Sergey Galevskiy & Evgenii Marin, 2024. "Optimizing Concession Agreement Terms and Conditions: Stakeholder Interest Alignment in the Petrochemical Sector," JRFM, MDPI, vol. 17(6), pages 1-16, June.
    • Handle: RePEc:gam:jjrfmx:v:17:y:2024:i:6:p:231-:d:1407159
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    References listed on IDEAS

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    1. David Espinoza & Javier Rojo & Arturo Cifuentes & Jeremy Morris, 2020. "DNPV: a valuation methodology for infrastructure and Capital investments consistent with prospect theory," Construction Management and Economics, Taylor & Francis Journals, vol. 38(3), pages 259-274, March.
    2. K.C. Iyer & Mohammed Sagheer, 2011. "A real options based traffic risk mitigation model for build-operate-transfer highway projects in India," Construction Management and Economics, Taylor & Francis Journals, vol. 29(8), pages 771-779, June.
    3. Arkin,V. & Slastnikov, A., 2017. "Optimization of Concession Payments in Stochastic Model of Public-Private Partnership," Journal of the New Economic Association, New Economic Association, vol. 36(4), pages 31-47.
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