EMPIRICAL ASSESSMENT OF RISKS IN IS/IT PROJECTS: CHALLENGES FOR MANAGERS

Risks in IS/IT projects are considered to have decisive effects on the success of these projects. Several researchers have identified and categorised risks in IS/IT projects into six major risk dimensions. This paper assesses the validity of these risk dimensions in light of the current IS/IT developments. An additional risk dimension related to outsourcing and new technologies is investigated. The data was gathered via an online survey tool, which provided 113 valid responses. The validity and the reliability of the risk dimensions were tested using statistical methods. The results revealed that the risk factors within the seven risk dimensions are still valid and reliable. Despite the fact, that all risk dimensions are important, this paper identifies the most significant three risk dimensions using the factor analysis. These three risk dimensions are Management, External Influences and New Technology. Notwithstanding the IS/IT developments in the recent years, it appears that the so far identified risks in IS/IT projects have not been mitigated yet. The proposed simplified set of risk dimensions might be used as a guide to identify the key risk factors in IS/IT projects. Keywords: Project Management, Risks, Information Systems, Factor Analysis

Contribution to the study of PPP arrangements in airport development, management and operation

Following the liberalization wave in the airline sector, airports have been gradually taken out of the public sphere and open to the private initiative. This phenomenon is generally referred to as privatization, but not all the cases consist of, in fact, a full divestiture of assets. Although infrastructure construction, management and financing are undertaken by the private sector during a pre-defined period, usually 30 years or more, the property remains public or is transferred to the public domain after that period. This is a form of Public-Private Partnership (PPP) where two different models can be found: institutionalized PPP or a typical contractual regime, such as the concession arrangements. PPP options have been a “hot” topic over the last decade, being developed in several sectors, such as energy, water, road and seaports transportation infrastructures, etc, but few studies in the literature can be found on the PPP projects development in airport systems, for example, as far as risk-sharing is concerned. This paper looks at recent developments in airport “privatization” and “deregulation”, distinguishing privatizations from PPP arrangements, through a case study approach, and establishing a comparative analysis of different PPP models used for airport management. Some comments are made about the Portuguese model and the announcement of future privatization.Airport Concessions; Portugal; Public-Private Partnerships; Privatization.

INFRISK : a computer simulation approach to risk management in infrastructure project finance transactions

Few issues in modern finance have inspired the interest of both practitioners and theoreticians more than risk evaluation and management. The basic principle governing risk management in an infrastructure project finance deal is intuitive and well-articulated: allocate project-specific risks to parties best able to bear them (taking into account each party's appetite for, and aversion to, risk); control performance risk through incentives; and use market hedging instruments (derivatives) for covering marketwide risks arising from fluctuations in, for instance, interest and exchange rates, among other things. In practice, however, governments have been asked to provide guarantees for various kinds of projects, often at no charge, because of problems associated with market imperfections: a) Derivative markets (swaps, forwards) for currency and interest-rate risk hedging either do not exist or are inadequately developed in most developing countries. b) Limited contracting possibilities (because of problems with credibility of enforcement). c) Differing methods for risk measurement and evaluation. Two factors distinguish the financing of infrastructure projects from corporate and traditional limited-recourse project finance: 1) a high concentration of project risk early in the project life cycle (pre-completion), and 2) a risk profile that changes as the project comes to fruition, with a relatively stable cash flow subject to market and regulatory risk once the project is completed. The authors introduce INFRISK, a computer-based risk-management approach to infrastructure project transactions that involve the private sector. Developed in-house in the Economic Development Institute of the World Bank, INFRISK is a guide to practitioners in the field and a training tool for raising awareness and improving expertise in the application of modern risk management techniques. INFRISK can analyze a project's exposure to a variety of market, credit, and performance risks form the perspective of key contracting parties (project promoter, creditor, and government). Their model is driven by the concept of the project's economic viability. Drawing on recent developments in the literature on project evaluation under uncertainty, INFRISK generates probability distributions for key decision variables, such as a project's net present value, internal rate of return, or capacity to service its debt on time during the life of the project. Computationally, INFRISK works in conjunction with Microsoft Excel and supports both the construction and the operation phases of a capital investment project. For a particular risk variable of interest (such as the revenue stream, operations and maintenance costs, and construction costs, among others) the program first generates a stream of probability of distributions for each year of a project's life through a Monte Carlo simulation technique. One of the key contributions made by INFRISK is to enable the use of a broader set of probability distributions (uniform, normal, beta, and lognormal) in conducting Monte Carlo simulations rather than relying only on the commonly used normal distribution. A user's guide provides instruction on the use of the package.Banks&Banking Reform,Economic Theory&Research,Environmental Economics&Policies,Payment Systems&Infrastructure,Public Sector Economics&Finance,Financial Intermediation,Banks&Banking Reform,Environmental Economics&Policies,Economic Theory&Research,Public Sector Economics&Finance

Identification of risk factors leading to cost and time overrun in B-O-T projects

As infrastructural investments are vital in developing countries, it’ll not solely facilitate to foster the economic growth of a nation, however it’ll additionally act as a platform within which new kinds of partnership and collaboration may be developed. The developments of BOT have attracted participation of native and foreign non-public sector capitalist to secure funding and to deliver projects on time, within the budget and to the desired specifications. There are many complexities in projects because of the variety of factors in project’s trend and also the dependence of project primarily on national factors. Because of these complexities and their long-term operation, the projects meet with uncertainty and numerous risks. Effective risk management methods and good managerial skills are required in guaranteeing the success of the project. In recent years, due to substantial increase in the amount of construction companies along with the changes in the government administrations, the construction projects are exposed to cost and time overrun and has huge impact on the progress of works within the industry. Although, the sector is considered to be a key driver of economic growth, time and cost overruns threaten to limit the sector’s potential to help achieve the desired growth and ensure efficient capital expenditure. Keywords—BOT, cost overrun, delays, ris

The rise, the fall, and ... : the emerging recovery of project finance transport

Recent developments in emerging financial markets have dramatically changed the appetite for (and terms of) transport infrastructure projects. As a result of defaults in Asia and Russia and devaluations in Asia, Brazil, and Russia, political and currency and exchange risk premia have increased dramatically. Given large needs for sovereign debt financing, infrastructure project finance will be seeking guarantees at the same time as governments are issuing primary securities. Large portfolio outflows in emerging market funds mean that the sources of both equity and debt capital that became available in the mid-1990s are drying up for all but the most creditworthy projects. Moreover, real economic effects from financial events have consequences in the transport sector, since transport is a derived demand. Any decline in real economic activity is felt quickly in traffic levels and revenues. Currency devaluations that help spur exports may generate higher volumes for seaports and air cargo activity. These effects vary by sector, especially over the medium to longer term. Declines in real economic activity make matters especially difficult for toll roads, as drivers shift to free alternatives and reduce the number of trips taken. What does all this mean for project finance in transport? Risks have increased. Debt finance costs more. The available tenor of debt instruments has shortened and more equity is required for projects. The sources and availability of equity finance have changed. Project finance efforts have shifted from new projects to the privatization, rehabilitation, and expansion of existing facilities. And a"superclass"of sponsors, bankers, and investors has emerged. Failures and mistakes in project finance deals in the 1990s were sharp and persistent. But much has been learned about sound project economics, conservative financial structures, comprehensive sensitivity analysis, the effects of macroeconomic factors, and the need for proper incentives and sound institutional and regulatory arrangements.Banks&Banking Reform,Payment Systems&Infrastructure,Financial Intermediation,Labor Policies,Public Sector Economics&Finance,Housing Finance,Public Sector Economics&Finance,Banks&Banking Reform,Financial Intermediation,Municipal Financial Management

Green Finance: Leveraging Investment for Environmental Protection

Some political narratives describe the relationship between environmental protection and economic growth as two inherently incompatible goals. As the global community turns its attention to implementing international climate agreements, this story is ceding ground to the realization that the economy must facilitate a transition to sustainability. With limited government funding available, private investments offer an opportunity to dramatically increase and leverage funding to address daunting environmental problems. Green financing will play a critical role in the shift to a green economy. Governments, intergovernmental organizations, financial institutions, corporations, and nongovernmental organizations (NGOs) are examining green financing mechanisms in earnest. Financial institutions are enabling investment in green infrastructure, and many have signed on to the Equator Principles, a risk management framework for determining, assessing, and managing environmental and social risk in projects. NGOs and governments are promoting public policies that encourage investments in sustainability, and developing public and private mechanisms to facilitate investments in environmentally beneficial projects, such as the Paris Climate Agreement\u27s Green Climate Fund. With targets including pollution control, biodiversity protection, and materials management, as well as investments directly related to decreasing reliance on fossil fuels, the impacts of green financing could reshape the landscape for environmental professions. On June 6, 2017, ELI held a public seminar to present recent developments in this field. Below we present a transcript of the discussion, which has been edited for style, clarity, and space considerations

Programmes in transition - between closure and start. Review of programme developments: Winter-Summer 2007

The past six months have seen a shift in emphasis from the 2000-2006 to the 2007-2013 programmes. Programme managers and other implementing organisations have not only been negotiating draft programmes for 2007-2013 with European Commission staff, but have also been undertaking a range of tasks to prepare for implementing these programmes. A number of initiatives have also occurred at EU level, which direct policymakers’ attention forward to the EU budget review of 2008-2009 and beyond. In addition, ongoing efforts have been needed to ensure that the remaining funds under the 2000-2006 programmes are effectively absorbed, and that all technical preparations for programme closure are underway

Republic of Ghana Country Strategy Paper 2012-2016

This report aims to propose a Bank Group's strategy for supporting Ghana's development efforts over the period 2012 -- 2016. Several factors make a new Bank country strategy for Ghana particularly timely at this moment. These include the enormous challenges the country still faces in its development trajectory in spite of its impressive growth in the last decade, the recent adoption by the Government of the "Ghana Shared Growth and Development Agenda" (GSGDA), the promising developments the country is experiencing in its economic prospects, including becoming an oil producer, attracting interest from BRICS, and the recent completion by the Bank and other development partners of a number of key knowledge products. All these combined provides an opportunity for the Bank and Ghana to lay the foundations for a renewed partnership