• Title/Summary/Keyword: Project finance

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Value Management of Private Finance Initiative Projects (민간투자사업을 위한 VE 적용방안)

  • Lim, Jong-Kwon;Kim, Seoung-Il
    • Proceedings of the Korean Institute Of Construction Engineering and Management
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    • 2006.11a
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    • pp.123-130
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    • 2006
  • Recently, Korean government promotes BTL(Build-Transfer-Lease) for their public construction project to apply private sector's experience and finance initiatives. Many of public buildings and civil infrastructure projects were planned to be delivered by BTL and it helps to continue public projects under tight budget conditions. Since the characteristics of BTL projects, creative ideas for the project function, performance and its LCC (Life Cycle Cost) become more important than usual public work project. This paper introduces the systematic "VE job Plan" application techniques for BTL project and shows the process. This study shows the application of "VE job Plan" for BTL project to help decision making and value improvement. Also, Project cost was estimated by LCC (Life Cycle Cost) analysis. Technical "FAST diagram"was developed and used to find major functions of the project. So, it helps to improve performance of functions and make creative ideas. FAST diagram also help to find relationships between functions and cost. A case study (Daegu Art Gallery BTL Project) was conducted using proposed "VE job Plan. Study demonstrates how value management helps save money and increase functional performance. Researcher found that project can save cost and improve performance of functions significantly by using appropriate VE analysis process at appropriate time.

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Preparatory Applications for Performance-based Regulatory System in Japanese Landscape Architecture Related Fields (일본 조경관련 분야의 성능규정화 대비방안)

  • Kim, Min-Soo
    • Journal of the Korean Institute of Landscape Architecture
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    • v.35 no.5
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    • pp.37-45
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    • 2007
  • WTO/TBT requires that, for technical regulations affecting trade, technical regulatory requirements must be specified where possible in terms of performance rather than design or descriptive characteristics. The movement which made "performance" a keyword in landscape architecture was activated in Japan, one of the leading counties in performance-based regulatory system(PBRS). The Japanese recent movement of systematization activity on performance-based standards and specifications was reviewed and operational applications for performance-based regulatory system in South Korea are summarized as follows: 1. The establishment of performance standards that can be properly evaluated by assessment indicators is necessary in cases when quantitative evaluation is difficult. 2. As a preparation for PBRS, a brief procurement system by technical proposal for the landscape design and construction is necessary. 3. As a preparation for PBRS, activation of an environmental performance evaluation on experimental construction is necessary. 4. As a preparation for PBRS, a certification system of environmental performance on various landscape construction methods is necessary. 5. The Private Finance Initiative Project is the most similar to PBRS therefore, activation of the Private Finance Initiative Project is necessary in landscape architecture projects for park rehabilitation.

How to Reflect Sustainable Development, exemplified by the Equator Principles, in Overseas Investment (해외투자(海外投資)와 지속가능발전 원칙 - 프로젝트 파이낸스의 적도원칙(赤道原則)을 중심으로 -)

  • Park, Whon-Il
    • THE INTERNATIONAL COMMERCE & LAW REVIEW
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    • v.31
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    • pp.27-56
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    • 2006
  • Today's financial institutions usually take environmental issues seriously into consideration as they could not evade lender liability in an increasing number of cases. On the international scene, a brand-new concept of the "Equator Principles" in the New Millenium has driven more and more international banks to adopt these Principles in project financing. Sustainable development has been a key word in understanding new trends of the governments, financial institutions, corporations and civic groups in the 21st century. The Equator Principles are a set of voluntary environmental and social guidelines for sustainable finance. These Principles commit bank officers to avoid financial support to projects that fail to meet these guidelines. The Principles were conceived in 2002 on an initiative of the International Finance Corporation(IFC), and launched in June 2003. Since then, dozens of major banks, accounting for up to 80 percent of project loan market, have adopted the Principles. Accordingly, the Principles have become the de facto standard for all banks and investors on how to deal with potential social and environmental issues of projects to be financed. Compliance with the Equator Principles facilitates for endorsing banks to participate in the syndicated loan and help them to manage the risks associated with large-scale projects. The Equator Principles call for financial institutions to provide loans to projects under the following circumstances: - The risk of the project is categorized in accordance with internal guidelines based upon the environmental and social screening criteria of the IFC. - For Category A and B projects, borrowers or sponsors are required to conduct a Social and Environmental Assessment, the preparation of which must meet certain requirements and satisfactorily address key social and environmental issues. - The Social and Environmental Assessment report should address baseline social and environmental conditions, requirements under host country laws and regulations, sustainable development, and, as appropriate, IFC's Environmental, Health and Safety Guidelines, etc. - Based on the Social and Environmental Assessment, Equator banks then make agreements with borrowers on how they mitigate, monitor and manage the risks through a Social and Environmental Management System. Compliance with the plan is included in the covenant clause of loan agreements. If the borrower doesn't comply with the agreed terms, the bank will take corrective actions. The Equator Principles are not a mere declaration of cautious banks but a full commitment of lenders. A violation of the Principles in the process of project financing, which led to an unexpected damage to the affected community, would not give rise to any specific legal remedies other than ordinary lawsuits. So it is more effective for banks to ensure consistent implementation of the Principles and to have them take responsible measures to solve social and environmental issues. Public interests have recently mounted up with respect to environmental issues on the occasion of the Supreme Court's decision (2006Du330) on the fiercely debated reclamation project at Saemangeum. The majority Justices said that the expected environmental damages like probable pollution of water and soil were not believed so serious and that the Administration should continue to implement the project seeking ways to make it more environment friendly. In this case, though the Category A Saemangeum Project was carried out by a government agency, the Supreme Court behaved itself as a signal giver to approve or stop the environment-related project like an Equator bank in project financing. At present, there is no Equator bank in Korea in contrast to three big banks in Japan. Also Korean contractors, which are aggressively bidding for Category A-type projects in South East Asia and Mideast, might find themselves in a disadvantageous position because they are generally ignorant of the environmental assessment associated with project financing. In this regard, Korean banks and overseas project contractors should care for the revised Equator Principles and the latest developments in project financing more seriously. It's because its scope has expanded to the capital cost of US$10 million or more across all industry sectors regardless of developing countries or not. It should be noted that, for a Korean bank, being an Equator bank is more or less burdensome in a short-term period, but it must be conducive to minimizing risks and building up good reputation in the long run.

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Project Delivery Systems and Project Performance;An Evaluation Model for Public Construction Projects (공공건설사업의 발주방식 선정 및 성과평가 모델)

  • Yu, Il-Han;Kim, Kyung-Rai
    • Proceedings of the Korean Institute Of Construction Engineering and Management
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    • 2007.11a
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    • pp.41-47
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    • 2007
  • The selection of the reasonable project delivery system (PDS) is crucial for a successful performance of a project, which means to achieve project objectives. Furthermore, the project performance has been tightly related to the selection of PDS appropriate to pertinent project characteristics. In this context, the ministry of finance and economy of Korea launched two new project delivery systems called "Best Value Contract (Design-Bid-Build)" and "Bridging Contract (Design-Build)" in October of 2007 by revising enforcement ordinances of "Act on Contracts to Which the State is a Party". For efficient operation of the new project delivery systems, this paper suggested a PDS selection model which supports decision making of the reasonable PDS for a pertinent project by assessing characteristics of the public construction projects, both quantitatively and qualitatively. In addition, a PDS performance evaluation model was proposed in order to get feedback on the result of the PDS selection and the operation for the succeeding project. The standard models suggested in this paper might be used as a tool to support the decision making of the public organizations.

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Study on an Establishment of an Online Union Catalog System through a MARC Conversion - Focusing on the Project of KIEP Northeast Asia - (MARC 변환을 통한 온라인종합목록 시스템구축에 관한 연구 - KIEP 동북아 Project를 중심으로 -)

  • Kim, Yun-Sil
    • Journal of Information Management
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    • v.28 no.1
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    • pp.1-33
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    • 1997
  • Led by KIEP, this project to establish an Online Union Catalog System on Northeast Asia is the first such attempt to create a collaboration between social science libraries in Korea. This Online Union Catalog System is seen as a problem solving mechanism, as it helps to maximize efficiency in utilizing labor, finance, and data, by sharing library resources. This study focuses on the process of converting databases in a non-MARC format to a MARC format.

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A STUDY ON DEVELOPING THE CALCULATION SYSTEM OF DISBURSEMENT FOR GOVERNMENT ON THE BTL PROJRCTS

  • Chun-Kyong Lee;Tae-Keun Park
    • International conference on construction engineering and project management
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    • 2009.05a
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    • pp.649-657
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    • 2009
  • BTL projects, which has been 3 years since it was carried out in 2008, trigged the controversy on the adequacy in the calculation of disbursement for Government due to such problems as low earning rate and the burden of service level compared with the project suggestion. Thus, the purpose of this study is to offer a suggestion on the calculation system for the purpose of the standardized - expense appropriation by item and database including the antecedent study on the finance model and the feasibility in BTL projects. The system is composed of 4 steps - project management, basic database, an analysis on expense by item and the result, and an analysis on sensitivity, and it is possible to carry out a comparative analysis on single and multi alternatives by variable change along with the ground on expense calculation.

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A New Definition of an IRR (내부수익률의 새로운 정의)

  • Jin Wook Kim;Hyun joo Lee;Dong Soo Cha
    • Proceedings of the Society of Korea Industrial and System Engineering Conference
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    • 2002.05a
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    • pp.9-18
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    • 2002
  • A capital investment problem is essentially one of determining whether the anticipated cash Inflows from a proposed project are sufficiently attractive to invest funds in the project. The net present value(NPV) criterion and internal rate of return(IRR) criterion are widely used as means of making investment decisions. A positive NPV means the equivalent worth of the inflows is greater than the equivalent worth of outflows, so, the project makes profit. Business people are familiar with rates of return because they all borrow money to finance ventures, even If the money they borrow is their own. Thus they are apt to use the IRR in preference to the NPV. The IRR can be defined as the discount rate that causes the net present value of a cash flow to equal zero. Why the project are accepted if the project's IRR is greater than the investor's minimum attractive rate of return. Against the NPV, the definition cannot distinctly explain the concept of the IRR as decision criterion. We present a new definition of the IRR as the ratio of profit on the invested capital.

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Understanding of a Rate of Return Analysis using an IRR (내부수익률을 이용한 수익률분석법에 대한 이해)

  • 김진욱;이현주;차동수
    • Journal of Korean Society of Industrial and Systems Engineering
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    • v.25 no.5
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    • pp.9-14
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    • 2002
  • A capital investment problem is essentially one of determining whether the anticipated cash inflows from a proposed project are sufficiently attractive to invest funds in the project. The net present value(NPV) criterion and internal rate of return(IRR) criterion are widely used as means of making investment decisions. A positive NPV means the equivalent worth of the inflows is greater than the equivalent worth of outflows, so, the project makes profit. Business people are familiar with rates of return because they all borrow money to finance ventures, even if the money they borrow is their own. Thus they are apt to use the IRR in preference to the NPV. The IRR can be defined as the discount rate that causes the net present value of a cash flow to equal zero. Why the project are accepted if the project's IRR is greater than the investor's minimum attractive rate of return\ulcorner Against the NPV, the definition cannot distinctly explain the concept of the IRR as decision criterion. We present a new definition of the IRR as the ratio of profit on the invested capital.

민자사업의 사업관리 사례분석

  • Lee Kwan-Young;Kim Se-Jong
    • 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.

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State and Subject of the 'Recreating Cultural and Traditional Village' by the Inhabitants Participation - Focused on the Chungju Mokge Village - (주민참여에 의한 문화·역사 마을가꾸기의 현황과 과제 -충주 목계 문화·역사마을을 중심으로 -)

  • Kim, Seung-Geun
    • Journal of the Korean Institute of Rural Architecture
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    • v.10 no.3
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    • pp.43-50
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    • 2008
  • This research is arranged that process and progress facts of 'recreating cultural and traditional village' by the inhabitants participation that in the process during devised a planning of Chungju Mokge village the beginning in 2007. Also it is an investigation that process 'recreating cultural and traditional village' by the themselves through consideration and volition of inhabitants since the beginning stage to devised planning. The result of study are following; First, the inhabitants training inspired knowledge for this project and opened the eyes that themselves can sea it. According to it be foundation that inhabitants to bring their interest and participation of project in progress process. Second, The project were able to maintain transparency of public finance that by common and open of all cooperation process of inhabitants, administration supporter and specialist. And this is an important role about bring positive participation of inhabitants. Finally, the project 'recreating cultural and traditional village' promotion with support of 'Ministry of Culture, Sports and tourism' however this project existing the limits of the budget supporting. The limits are bigger than other rural projects.

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