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PurposeThe Public–Private Partnership (PPP) modality plays an important role in the procurement of global infrastructure projects. Regarding PPP's complex transaction structure, pricing of a PPP project is critical to both parties where the government pursues a high value for money (VFM) and the investor strives to maximize its financial gains. Despite the straightforward win–win principle, a formidable compromise is often the case to end up with a fairly acceptable price, subject to many determinants such as the risk profile, expected return, technological innovation and capacities of both parties. Among them, this study chooses to examine the “managing flexibility” (MF) capacity of investors in pricing of a PPP project, in light of the widely recognized importance of a real-option perspective toward the long term, complex and uncertain PPP arrangement. This study addresses two major questions: (1) how is MF in PPP projects to be valued and (2) how are PPP projects to be priced when considering a project's MF value.Design/methodology/approachA binomial tree model is used to evaluate the MF value in PPP projects. Based on the developed MF pricing model, net present value (NPV) and adjusted VFM value are then calculated. Finally, a multi-objective decision-making method (MODM) was adopted to determine the optimal level of returns based on invested capital (ROIC), return on operation maintenance (ROOM) and concession period.FindingsThe applicability and functionality of the proposed model is investigated using a real project case. For a given return, extended NPV and adjusted VFM value were calculated and analyzed using sensitivity analysis. Factor influence is shown by the model to be dependent on factor impact on cash flow. Subsequently, a multi-objective decision-making (MODM) model was adopted to determine the optimal level of returns, where the solution approximates the real-world bidding price. Results confirm that the pricing model provides a reliable and practical PPP proposal pricing tool.Originality/valueThis study proposes an integrated framework for valuing MF in PPP projects and thus more accurately determine optimal pricing of PPP projects than revealed in extant research. The model offers a practical tool to aid in the valuation of PPP projects.

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There are large fire safety hidden dangers in the construction site of mega-projects. In order to improve the ability of fire safety emergency response on site, in this paper, the number of demand points on the construction site are firstly determined, and through using risk assessment of operating conditions method, the risk is evaluated and the risk level is determined. Secondly, according to the construction site layout criteria and fire safety technical criteria, and taking the economy, distance, time and coverage of fire safety site selection as the basic factors, a multi-objective site selection optimization model for fire safety points is established. Multi-objective particle swarm optimization is used to solve the multi-objective site selection model, and a series of fire safety point site selection schemes are obtained. Finally, the analytic hierarchy process is used to select the best scheme from a series of schemes. The research ideas and conclusions of this paper provide a scientific and reasonable analysis framework and ideas for site selection of fire safety points for mega projects, which has certain applicability and practicability.

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