Effect of institutional context and finance context of housing finance on home ownership among low-income earners in Bauchi

Purpose The purpose of this paper is to evaluate the effects of housing finance institutional and financial context on beneficiaries’ context to low income earners in Bauchi Local Government Area, Bauchi, Nigeria Design/methodology/approach This paper adopted a quantitative research approach. Self-administered structured questionnaires were used to collect information from 357 primary school teachers in Bauchi Local Government Area, Bauchi, Nigeria. Partial least squares-structural equation modeling was used to analyze the data collected using SmartPLS 2 software Findings This study revealed that effectiveness of financial institutions and their performance has significant positive causal effect on low income earners housing ownership context, which shows that performance and effectiveness of the housing finance institutions is vital to housing ownership for the low income earners in the study area. Thus, performance of housing finance institutions and their effectiveness has direct effects on low income earners housing ownership through finance affordability Practical implications The prime consumer of these research findings are the financial institutions, this will make them bulk up in terms of their performance and effectiveness toward housing finance accessibility and affordability to the low income earners such as the primary school teachers in the study area. Originality/value This paper used the technology organization environment theory, which is a multi-perspective theory to evaluate the concepts of institutional, finance and beneficiaries context with respect to housing finance in Bauchi by conceptualizing institutional context as effectiveness and performance, finance context as affordability and accessibility and beneficiaries context as ownership.

Risk transfer in project finance loans for toll road using credit default swaps

Purpose The purpose of this paper is to demonstrate the applicability of the Credit Default Swaps (CDS), as a financial instrument, for transferring of risk in project finance loans. Also, an equation has been derived for pricing of CDS spreads. Design/methodology/approach The debt service cover ratio (DSCR) is modeled as a Brownian Motion (BM) with a power-law model fitted to the mean and half-variance of the existing data set of DSCRs. The survival probability of DSCR is calculated during the operational phase of the project finance deal, using a closed-form analytical method, and the results are verified by Monte Carlo simulation (MCS). Findings It is found that using the power-law model yields higher CDS premiums. This in turn confirms the necessity of conducting rigorous statistical analysis in fitting the best performing model as uninformed reliance on constant time-invariant drift and diffusion model can erroneously result in smaller CDS spreads. A sensitivity analysis also shows that the results are very sensitive to the recovery rate and cost of debt values. Originality/value Insufficiency of free cash flow is a major risk in the toll road project finance and hence there is a need to develop innovative financial instruments for risk management. In this paper, a novel valuation method of CDS is proposed assuming that DSCR follows the BM stochastic process.

Key factors affecting commercial actors in collaborative working within the UK construction industry

Purpose Extensive research on the importance of collaborative working (CW) and aligning stakeholders’ interests in construction has been widely conducted. But often the practice of commercial actors during CW has often been overlooked, particularly within the UK setting, where scholars have lamented on the lack of industry-wide collaboration. This study aims to explore the factors affecting commercial actors in CW, specific to the UK construction industry. Design/methodology/approach The research used a context-based approach to seek stakeholders’ perspectives on the key factors affecting commercial actors in CW within the UK. Semi-structured interviews with individuals (contractors, cost consultants, designers among others) from construction and infrastructure organisations were conducted, using multiple case study investigations. The collected data was analysed using a case study approach, and principles of inductive thematic analysis to identify the key factors. Findings Findings from the analysis identified “institutional” factors such as transactional cost economic influence, the prevailing construction model influence and professional related drivers. Key drivers within these factors include commercial background and training, custom and practice, misaligned interests in projects, clients’ perception of consultants, cost-driven environment, conventional procurement protocols and bureaucratic functions. Originality/value In conclusion, these factors continue to affect CW with undue influence on commercial actors in the UK, thus preventing performance improvement demanded by successive UK Government reports. The context-based approach applied in this study is expected to provide some insight in construction management research, especially from a commercial perspective in the UK, to gain an understanding of how these factors are manifesting.

The challenge of implementing public-private partnerships: a transaction costs perspective on waste to energy projects in Indonesia

Purpose This study aims to explore the reasons behind the lengthy delays in completing a single public-private partnership (PPP) project in Indonesia and investigates how the transaction costs play a significant role in hindering the project’s success. Design/methodology/approach To broaden insight into the transaction cost theory, the authors used a single case study approach to provide a more in-depth analysis of a context whose complexity can be fully explored. As the primary data sources, 16 face-to-face semi-structured interviews were conducted with the stakeholders directly involved in the project’s initiation, design and execution. Findings This case study demonstrates that transaction cost issues, both political and economic, play a significant role. This study has identified four main problems associated with transaction costs hindering project success, namely, executing agencies’ lack of knowledge and experience, lack of coordination for such a complex governance structure that links too many stakeholders and the financial and political risk that increase the uncertainty and public distrust. Research limitations/implications This study contributes mainly to the PPP and transaction costs economics literature, providing empirical evidence on why major PPP projects may fail to be procured. The Greater Bandung waste to energy (WTE) Project case demonstrates that transaction costs, both political and economic, have played a significant role in the lengthy delay of the PPP project. Practical implications As the project involves many transaction cost issues, mapping the failure factors at the project sites can significantly contribute to the practitioners/stakeholders involved in the PPP WTE projects. Therefore, this study provides a lesson to the policymakers at all levels interested in PPPs to consider the issues of transaction costs related to the PPP projects. It can be used as guidance as well as a reference for future PPP WTE projects in Indonesia. Social implications Mapping the failure factors also signifying the response of the public in the PPP WTE projects undertaken. As the citizens become more rule-conscious and rights-conscious, they demand the opportunity to participate in creating rules and project plans. If the project failed to consult with affected communities and undermined democratic accountability, the angry citizens will confront the government to cancel the project. Therefore, political and economic influences for public attitude play significant roles in making the PPP WTE projects successful. Originality/value This study provides insight into the transaction cost issues that have hindered the completion of Indonesia’s PPP WTE project over the past 15 years. Additionally, the project feasibility analysis should include an understanding of transaction costs for partnering in PPP.

Unpacking the framework of unsolicited proposal for public private partnership projects – the Indian case

Purpose The most recent advent of the unsolicited proposal in the public private partnership mode of infrastructure procurement has changed the duties and roles of private and public sector agencies. Also, they have increased the practitioners' difficulties to work out strategic mechanisms and methods to manage these unsolicited proposals (USP) effectively. So, this study aims to understand how well equipped are the Indian USP guidelines for managing procurement. Design/methodology/approach Content analysis with coding procedures was carried to understand the regulations of USP frameworks of India over the four stages of USP procurement. Findings The findings show that there are severe flaws in various states' frameworks. The states have flaws in their policies in implementation features across the stages of USP such as defined objectives, the absence of fees and review timeframes in the submission, time frame and guidance on benchmarking and market testing in evaluation and development, time frame for bidding and access to information in procurement stages. Originality/value The USP implementation framework developed as part of this study can direct the policymakers and practitioners to improve public procurement regulations and the necessary changes for the successful implementation of USPs. In doing this, the private sector is enabled to develop more competitive and innovative proposals.

Attributes and impact of advance payment system on cash flow, project and organisational performance

Purpose Construction companies require meticulous and thorough financial planning to ensure business survival in an increasingly competitive global market. Past studies assert that cash flow management is also crucial to meeting project and organisational performance expectations. However, the link between an advance payment system (APS), cash flow and project performance has hitherto received scant academic attention. Therefore, this study aims to investigate the attributes and impact of APS on cash flow, project and organisational performance. This study surveyed all registered contractors listed in Grades 1–9 on the Construction Industry Development Board Register of Contractors in South Africa. Design/methodology/approach This study adopted an empirical epistemological design and deductive reasoning to analyse primary data collated via a questionnaire data collection instrument. Summary statistical and regression analysis were used to explore data garnered. Findings This study found that key significant attributes of APS in South Africa were payment of balance to the contractor upon project delivery; advance payment to contractors before the commencement of the work; and payment to contractors as agreed. This study proffers that project performance in terms of cost, time and quality performance is highly and positively supported by APS. Moreover, APS positively supports the efficiency, competitiveness and profitability of construction organisations. Cumulatively, these findings confirm that APS attributes in South Africa conforms to the global attributes of APS. The research concludes that client use of APS on projects improves the likelihood of attaining improved quality and time performance. This paper concludes with a recommendation that both public and private clients consider the option of an APS as the ideal payment system to support project and organisational performance. Originality/value To the best of the authors’ knowledge, this work constitutes the first attempt to explore the linkages between an APS, cash flow and project performance in South Africa and seeks to engender wider polemic debate and further discussion among industry stakeholders.

A retrospection of methodological pluralism in the Journal of Financial Management of Property and Construction (2005-2020)

Purpose This paper presents a review of research methodologies used in addressing problems in the financial management of property and construction journals from 2005 to 2020. Design/methodology/approach Content analysis of 258 research papers published in the Journal of Financial Management of Property and Construction was carried out, enabling the exploration of research approaches, epistemology, strategies, data collection and data analysis methods used in addressing problems researched in the area of financial management of property and construction Findings The findings show that quantitative approaches and methods dominate, whereas qualitative and mixed methods were prominent in-depth understanding of a topics were needed. Interestingly, almost a third of the publications did not adopt quantitative approaches. In some journal issues, there was relatively high use of qualitative and multi-method approaches and up to 12% of the articles published over the past 16 years could be described as based on pragmatism. Research limitations/implications An important implication of this paper is that a conventionally number-based area of research does not preclude the use of qualitative and mixed approaches. The findings are only generalisable to the Journal of Financial Management of Property and Construction. Practical implications Financial management researchers could benefit greatly by considering pluralistic approaches more in the design of their studies. Originality/value To the best of the authors’ knowledge, this study is an original synthesis of the articles published between 2005 and 2020. It provides new insight into the use of research methodologies by authors and how they have been combined to address their research problems. It further investigates an old issue or question about methodological choice-making using new evidence and original empirical work.

Real options analysis of revenue risk sharing in post-disaster housing reconstruction

Purpose Post-disaster housing reconstruction (PDHR) demands a considerable percentage of global property investment, yet the post-disaster environment presents intricate challenges to reconstruction financing for governments and at the same time, revenue uncertainty for private investors. The purpose of this study is to develop a methodology for tackling land shortage and the financial challenges of PDHR in the aftermath of a disaster. Design/methodology/approach This study developed a methodology based on a combined minimum revenue guarantee and maximum revenue cap model using a well-established real options analysis (ROA) for revenue risk sharing in PDHR projects and land readjustment (LR) for finance. The applicability of the purported model is demonstrated through an illustrative example. Findings The results show that flexibility in the options could increase the PDHR contractor’s risk profile by increasing the expected value of the contractor investment and reducing the probability of investment loss. On the other side, a cap on the contractor revenue stream would allow the government to benefit from any excess in revenue and would counterbalance the value of the option. Practical implications The framework proposed in this study could serve as a practical risk-revenue sharing in PDHR projects. Governments and policymakers could use the findings to enable the successful delivery of PDHR projects and consequently bring the quality of life of affected people to pre-disaster conditions. Originality/value This study can be considered as a first attempt toward the use of the Australian barrier style options structure, and the trinomial lattice valuation model in PDHR projects, which incorporates LR, public-private partnerships, governmental guarantees and PDHR concepts in one ROA-based framework.

Are the public tertiary education building projects devoid of risks in the Nigerian construction context?

Purpose The non-performance of construction projects in meeting the set objectives has continued to draw researchers worldwide. Despite this, little attention is accorded to public tertiary education building projects in Nigeria. Therefore, on this background, this study aims to assess the perceptions of stakeholders on the level of occurrence of risk factors in the public tertiary education building projects (TEBP) to enhance the performance of these projects. Design/methodology/approach The study adopted a quantitative method of data collection via a questionnaire survey. In total, 452 questionnaires were administered to the respondents comprising client representatives, consultants (quantity surveyors, architects, services and structural engineers and builders) and the contractor. The respondents were involved in the conception and execution of TEBP across five public tertiary education institutions in Ondo State, Nigeria. Of 452 questionnaires, 279 were retrieved and found suitable for analysis, indicating a 61.73% response rate. The reliability analysis for the research instrument was 0.965 via the Cronbach α test, indicating the high reliability of the instrument used for the data collection. Moreover, the clusters of risk factors also had reliability values that ranged between 0.719 and 0.875. Findings The study found inflation, delayed payments in contracts, high competition bids, delay in work progress and occurrence of variations are the most frequently occurring risk factors in public TEBP. By contrast, difficulty to access the site, environmental factors and pollution were found to be low-weighted risks with the least likelihood of occurrence. The results of this study indicated the existence of significant differences in some of the risk factors in terms of the level of risk occurrence in TEBP. The risk factors were eventually clustered into eight major groups for TEBP. The post hoc comparisons using the least significant difference test also indicated differences between the contractors and consultants in the ranking of risks occurrence in TEBP, but no significant differences between clients/contractors and clients/consultants. Research limitations/implications The findings in this study are limited to the public TEBP procured via competitive tendering; therefore, the results might not be applicable when other procurement methods are being considered. Besides, the study classified the project participants based on organizations and not on the different ownership status of the projects, such as federal or state government-owned TEBP. However, the literature shows that likelihood of risk occurrence could vary due to the degree of project ownership. Practical implications The information provided with respect to the most frequently occurring risk factors would enhance the performance of public TEBP. Originality/value This study contributes to the existing body of knowledge on the subject within a previously unexplored context where insights were provided on the most frequently occurring risk factors on the public TEBP.

Assessment of the government’s role performance in public-private partnership (PPP) toll road projects in Indonesia

Purpose This study aims to investigate the government’s role in the development of toll road projects that adopt public-private partnership (PPP) schemes in Indonesia. In addition to investigating its role, this study also attempts to quantitatively assess its performance as the use of quantitative analysis in this area is still fairly limited. The analysis was developed from the perspectives of two main stakeholders involved: government and private sectors. The findings of this study are expected to help both government and private sectors to better understand the government’s role as well as its performance in PPP toll road projects in Indonesia. Design/methodology/approach The data was analysed by using statistical methods. Following the identification of the government’s role in PPP toll road projects from the literature, a preliminary survey involving 12 highway construction experts was conducted to verify the initial findings from the literature review. Subsequently, the authors conducted a survey of 146 respondents from both government and private sectors. To analyse the collected data, both descriptive and inferential statistics were used, which include analysis of means, analysis of reliability, as well as independent T-test. T-test was used to examine differences in perception between the two groups. Findings In total, 12 criteria from the literature were used to assess the government’s role and its performance in PPP toll road projects in Indonesia. Based on the analysis, the authors find that the government’s role in the development of PPP toll road projects can be considered moderate in its performance. In this respect, the author argue that, instead of focusing on meeting all the criteria, it would be better for government to focus on meeting only a number of them, which include realizing smooth land acquisition, selecting appropriate concessionaire, offering a solution to community protests over environmental issues, providing substantial government support, providing supervision, enforcing the law and eradicating corruption. The results of this study provide valuable information for international parties aiming to participate in PPP toll road projects in Indonesia, considering this country has been offering a wide opportunity for private sectors to be involved in developing infrastructure. Meanwhile, for the host government, the findings can be used as the basis for conducting improvements to attract private sectors’ involvement and to achieve more successful upcoming PPP toll road projects in Indonesia. Research limitations/implications The findings of this study might provide valuable information for the host government to evaluate its role and performance to achieve more successful PPP toll road projects in the future. Rather than focusing on all attributes, the improvements can be made by focusing only on the critical ones: those ranked high on the importance and low on its performance. In addition, this finding can also help private sectors to better understand both the role and performance of government in Indonesia as this country offers a great opportunity for infrastructure investment through PPP schemes. Practical implications The findings of this study might provide valuable information for the host government to evaluate its role and performance to achieve more successful PPP toll road projects in the future. Rather than focusing on all attributes, the improvements can be made by focusing only on the critical ones: those ranked high on the importance and low on its performance. In addition, this finding can also help private sectors to better understand both the role and performance of government in Indonesia as this country offers a great opportunity for infrastructure investment through PPP schemes. Social implications Text. Originality/value This paper contributes to the body of knowledge on the criteria to assess the government’s role performance in the Indonesian PPP toll road projects. Whilst there is still limited research has been conducted regarding the government’s role in the PPP toll road projects in Indonesia, this study presented the criteria of the government’s role and showed how to assess and evaluate the host government’s performance based on these criteria in a more objective approach using quantitative method. This result can be used as the basis for improvements to achieve a more successful PPP toll road project in Indonesia and might be in other similar developing countries.