• Journal of Korean Society of Industrial and Systems Engineering
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• v.35 no.3
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• pp.192-203
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• 2012

As a leading nation of ubiquitous technology, South Korea has been promoting u-City pilot projects throughout the country. According to 'Fundamental Construction Law of u-City,' u-City projects are classified into old-town and new-town types. However, most projects have focused only on the new-town type. Pushing forward large-scale land development projects, Korea Land and Housing Corporation (LH Co.) under Ministry of Land Transport and Maritime Affairs (MLTM) has gained a development profit out of the u-City infrastructure and then donated the infrastructure to a local government without making any plan for operations. In the process of u-City pilot projects, old-towns have been relatively ignored and various of unexpected problems have emerged. Building the u-City of an old-town is not easy due to many constraints such as huge initial investment, long validity and verification procedures, lack of useful services for citizens, lack of professional outsourcing methods for business promotion, high operating costs of the integrated control center, inadequate law related, insufficient institutional requirements and so on. This paper introduces a case study on u-City development for an old-town, Ansan City, as a private investment project. The case will help boost u-City projects for old-towns by solving their problems and providing an effective operational mechanism. As the first BTL (Build-Transfer-Lease) project for constructing u-City, 'Broadband Information Network Development Project' of Ansan City will provide a reference model of expanding u-City projects for other cities.

• Proceedings of the Korean Institute Of Construction Engineering and Management
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• 2004.11a
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• pp.486-489
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• 2004

To enlarge the international competition and construction productivity, the domestic construction market attracts the private capital and expands the facility of :iocial Overhead Capital(SOC). However, the application of the business system used at the public project didn't utilize the effect of social overhead capital. It caused problems that parties' business was inefficient and their allotment of the risk was inadequate. This paper presents the course to reorganize the business system which the coincides with the origin aim of the SOC. For the reformation of the supervisor's work scope and business system and the government's overall project management, in other words, this paper proposes the professional organization to replace the superintendence and the formation of optimal business system. This paper confirms the privity of contract among parties of SOC project and parties' work scope and system between relative laws and concession agreement that government made a contract with Special purpose Company (SPC).

• Journal of Technology Innovation
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• v.5 no.1
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• pp.206-222
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• 1997

The conventional analysis with which justifies government intervention of the private sector's innovation activities is the market failure approach. According to such analysis, fund allocation through autonomous market mechanisms is not optimal in technology financing because of the disparity between the desirable level of investment for society as a whole and that for private firms. To optimize the fund allocation, public policies such as subsidy, preferencial loan and venture capital investment programs are designed for technology development projects performed by private firms. They, however, have not been effective in increasing private investment for such projects. In most cases, it was found that little considerations given to the relationship between uncertainty embodied in technology development projects and each types of financing. With respect to optimizing fund allocation, technology development projects should be financed by different means according to their probability of success and the expected value of technology. Employing various theoretical models on financing decision-making we verify here that technology development projects to be supported by commercial banks or venture capital institutions is limited contingent upon levels of uncertainty adn expected value. Under the assumption that financial institutions are risk averse, loan or investment can be available only if the probability of success of the project is higher than the probability premium and the current market rate of interest. Therefore, the projects that have lower probability of success and/or small expected return are excluded from commercial loan or investment programs. However, the remaining projects, whose probability of success is low but with high expected return, may be applied under government subsidy programs. To achieve optimality of fund allocation and to activate technology financing, we conclude that there should be a systematic division of role among financial institutions including government commercial banks, and venture capital institutions.

• International conference on construction engineering and project management
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• 2007.03a
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• pp.119-129
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• 2007

In January 2005, the BTL private investment project was introduced in the Korean construction market as part of the plan to provide high-quality public service and expand the required facilities in a timely manner. Nonetheless, problems such as the low earning rate at the beginning of the business, burden of service compared to the cost of the proposed business, and limitations of the local small and medium-sized companies in relation to their participation in the project arose. The LCC analysis system for the BTL projects was developed as part of efforts toward efficiently investigating the investment eligibility. Specifically, methods for LCC analysis were selected for each stage of the BTL project in relation to the requests of experts for military residential facilities and public educational facilities. Variables were then extracted to derive an accurate analysis value, LCC for the 5 cost items (initial investment cost, operating expenses, maintenance expenses, energy cost, and disposal cost), analyzed, and system enabling comparative analysis for single and multiple initiatives by year and item, developed. Thus, we have to clearly require the accumulation of data to examine the appropriateness of the results of LCC analysis based on data and results.

• Korean Journal of Construction Engineering and Management
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• v.7 no.4 s.32
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• pp.118-125
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• 2006

The Korean government is encouraging positively PIP(private infrastructure project) to relieve financial burden and get the facilities in time. The portion of the PIP has grown rapidly into 15% of the whole SOC(Social Overhead Capital) projects. It is estimated that the growth will continue for the present. However, there are still rising problems on efficiency of the project and productivity, properness of the project scale are pointed against surprising growth. In this study, we analyze underlying problems of private infrastructure investment project and suggest CM Models to relieve the problems. To verify the validity of the suggested models, a survey has been conducted through questionnaires and analyzed the taste of the stakeholder. The owner-support Model is chosen as the practical model to apply in time. By applying the suggested model to PIP, it is possible to enhance the efficiency and productivity of the project.

• Proceedings of the Korean Institute Of Construction Engineering and Management
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• 2008.11a
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• pp.606-609
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• 2008

Traditionally, the feasibility of the private investment is determined by NPV(Net Presented Value) based on DCF(Discounted Cash Flow) and the volume of government's subsidiary without quantifying the effect of overturn share ratio and MRG(Minimum Revenue Guarantee), these variables which can seriously effect on the economic feasibility. One of the most important reasons why these variables are not underestimated is that the quantifying methods are insufficiently or so complicatedly studied to apply practically the real project. Therefore, this study suggests the modified binominal option model to estimate the overturn share ratio and MRG and estimates how much these variables impact the private investment. Also, these results are helpful to estimate how much the government's subsidiary can be reduced.

• International conference on construction engineering and project management
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• 2007.03a
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• pp.509-519
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• 2007

Private financing is playing an increasing role in public infrastructure construction projects worldwide. However, private investors/operators are exposed to the financial risk of low profitability due to the inaccurate estimation of facility demand, operation income, maintenance costs, etc. From the operator's perspective, a sound and thorough financial feasibility study is required to establish the appropriate capital structure of a project. Operators tend to reduce the equity amount to minimize the level of risk exposure, while creditors persist to raise it, in an attempt to secure a sufficient level of financial involvement from the operators. Therefore, it is important for creditors and operators to reach an agreement for a balanced capital structure that synthetically considers both profitability and repayment capacity. This paper presents an optimal capital structure model for successful private infrastructure investment. This model finds the optimized point where the profitability is balanced with the repayment capacity, with the use of the concept of utility function and multi-objective GA (Generic Algorithm)-based optimization. A case study is presented to show the validity of the model and its verification. The research conclusions provide a proper capital structure for privately-financed infrastructure projects through a proposed multi-objective model.

• Journal of Information Technology Applications and Management
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• v.9 no.3
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• pp.79-95
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• 2002

As the budget size and complexity of 1T investment are growing, IT value measurement becomes more critical to the success of IT management In public organizations and private firms. It has been known that there are many factors such as IT costs, risks, qualify, and usage that should be taken Into consideration during the process of measuring IT value and making IT Investment decisions. However, little research has been done so far In order to analysis factors affecting the IT value and effectiveness. The purpose of this study Is to Investigate the impact of IT Project types and ownerships on IT value evaluation. The three research questions are as follows : (1) Does IT project type such as transactional, Informational, and infrastructure have any impact on 1T value measurement\ulcorner (2) Does the IT development ownership has any Impact on IT value\ulcorner (3) Does the IT operation ownership has any impact\ulcorner The empirical research was done at S-Electronics, world-wide known and the biggest manufacturing company in Korea, based on the method of structured interview. About 200 individual Information systems have been evaluated to calculate ROI measures, the dependent variable In this study. The results of statistical analysis show that two of three Independent variables, IT project types and IT development ownership, have statistically significant effects on IT value in terms of ROI measures.

• Journal of the Economic Geographical Society of Korea
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• v.11 no.2
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• pp.233-250
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• 2008

This paper aims to analyze the characteristics of BTL, and to propose the effective models connecting BTL and project finance, through the analysis of current state and case study of BTL. The main results of this study are as follows. Firstly, BTL business have been increasing fast, and most of projects are middle size projects below 100 billion Won. Nextly, key suggestions for improving BTL business model are analyzed, which are, first, risk allocation between public and private interests, second, improvement of method for selecting private investment consortium, and third, alleviation of long-term burden of local finance. Finally, effective models for connecting BTL and project finance, which are, first, model for using asset backed securities, second, model for dividing project corporations into construction corporation and operation corporation, and third, model for risk allocation between public and private interests.

• Proceedings of the Korean Institute Of Construction Engineering and Management
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• 2004.11a
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• pp.13-19
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• 2004

In most PFI(Private Finance Initiative) projects in Korea, the project management are in charge of the Special Purpose Company(SPC) established for carrying out the project. This paper is a case study about an owner CM executed by the organizations and staffs of SPC itself. : Seoulbeltway (Ilsan $\~$ Toegaewon) Private Investment Project. In time management area, the SfC was the leader of project management throughout the life circle - plan, design, permit, construction, operation and maintenance - beyond the schedule manager's role. In cost management area, the methods of reducing the total costs by VE, new technologies, etc. has been needed assuming the construction risks were subject to SPC.