scelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only ICCREM 2017 Prefabricated Buildings, Industrialized Construction, and Public-Private Partnerships Edited by Yaowu Wang Yongshi Pang Geoffrey Q P Shen Yimin Zhu, Ph.D Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved ICCREM 2017 PREFABRICATED BUILDINGS, INDUSTRIALIZED CONSTRUCTION, AND PUBLIC-PRIVATE PARTNERSHIPS PROCEEDINGS OF THE INTERNATIONAL CONFERENCE ON CONSTRUCTION AND REAL ESTATE MANAGEMENT 2017 November 10–12, 2017 Guangzhou, China SPONSORED BY Modernization of Management Committee of the China Construction Industry Association The Construction Institute of the American Society of Civil Engineers EDITORS Yaowu Wang Yongshi Pang Geoffrey Q P Shen Yimin Zhu, Ph.D Published by the American Society of Civil Engineers Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved Published by American Society of Civil Engineers 1801 Alexander Bell Drive Reston, Virginia, 20191-4382 www.asce.org/publications | ascelibrary.org Any statements expressed in these materials are those of the individual authors and not necessarily represent the views of ASCE, which takes no responsibility for any statement made herein No reference made in this publication to any specific method, product, process, or service constitutes or implies an endorsement, recommendation, or warranty thereof by ASCE The materials are for general information only and not represent a standard of ASCE, nor are they intended as a reference in purchase specifications, contracts, regulations, statutes, or any other legal document ASCE makes no representation or warranty of any kind, whether express or implied, concerning the accuracy, completeness, suitability, or utility of any information, apparatus, product, or process discussed in this publication, and assumes no liability therefor The information contained in these materials should not be used without first securing competent advice with respect to its suitability for any general or specific application Anyone utilizing such information assumes all liability arising from such use, including but not limited to infringement of any patent or patents ASCE and American Society of Civil Engineers—Registered in U.S Patent and Trademark Office Photocopies and permissions Permission to photocopy or reproduce material from ASCE publications can be requested by sending an e-mail to permissions@asce.org or by locating a title in ASCE's Civil Engineering Database (http://cedb.asce.org) or ASCE Library (http://ascelibrary.org) and using the “Permissions” link Errata: Errata, if any, can be found at https://doi.org/10.1061/9780784481059 Copyright © 2017 by the American Society of Civil Engineers All Rights Reserved ISBN 978-0-7844-8105-9 (PDF) Manufactured in the United States of America ICCREM 2017 iii Preface Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved We would like to welcome you to the 2017 International Conference on Construction and Real Estate Management (ICCREM 2017) Harbin Institute of Technology, Guangzhou University, Hong Kong Polytechnic University, Louisiana State University, University of Alberta, Luleå University of Technology, Heriot-Watt University, Marquette University, Karlsruhe Institute of Technology The Conference is a continuation of the ICCREM series which have been held annually since 2003 The theme for this conference is “Prefabricated Construction and Construction Industrialization” It especially highlights the importance of construction industrialization and prefabricated technology for construction engineering and management The conference proceedings include 174 peer-review papers covered eleven important subjects And all papers went through a two-step peer review process The proceedings of the congress are divided into four parts: Prefabricated Buildings, Industrialized Construction and PPP Industry Regulation and Sustainable Development Real Estate and Urbanization Project Management and Construction Technology On behalf of the Construction Institute, the American Society of Civil Engineers and the 2017 ICCREM Organizing Committee, we welcome you and wish you leave with a wonderful experience and memory at ICCREM 2017 Professor Yaowu Wang Professor Yongshi Pang Harbin Institute of Technology Guangzhou University P R of China P R of China Acknowledgments Organized by Harbin Institute of Technology, P.R China Guangzhou University, P.R China Hong Kong Polytechnic University, P.R China Louisiana State University, USA University of Alberta, Canada Luleå University of Technology, Sweden Heriot-Watt University, UK Marquette University, USA Karlsruhe Institute of Technology, Germany © ASCE ICCREM 2017 iv Executive Editors Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved Xianfei Yin Xianwei Meng Zhuyue Li Chong Feng Wei Gao Yuru Gao Tingting Chen Jia Ding Xiangkun Qi Yue Cao Zixin Han Tongyao Feng Hongmeng Kang Conference website: http://www.iccrem.com/ Email: iccrem@vip.163.com Conference Committee Committee Chairs Prof Yaowu Wang, Harbin Institute of Technology, P.R China Prof Geoffrey Q.P Shen, Hong Kong Polytechnic University, P.R China Conference Executive Chair Prof Jiyang Fu, Guangzhou University, P.R China Conference Co-Chairs Prof Yongshi Pang, Guangzhou University, P.R China Director Katerina Lachinova, Construction Institute of ASCE.(ASCE members), USA Prof Yimin Zhu, Louisiana State University, USA Prof Mohamed Al-Hussein, University of Alberta, Canada Prof Thomas Olofsson, Luleå University of Technology, Sweden Prof Ming Sun, Heriot Watt University, UK Prof Yong Bai, Marquette University, USA Prof Kunibert Lennerts, Karlsruhe Institute of Technology, German Organizing Committee and Secretariat General Secretariat Prof Xiaolong Xue, Harbin Institute of Technology, P.R China Deputy General Secretariat Prof Xuetong Wang, Guangzhou University, P.R China © ASCE ICCREM 2017 v Committee Members Asso Prof Chengshuang Sun, Harbin Institute of Technology, P.R China Asso Prof Qingpeng Man, Harbin Institute of Technology, P.R China Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved Mr Zhenmin Yuan, Harbin Institute of Technology, P.R China Mr Shiwei Chen, Harbin Institute of Technology, P.R China © ASCE ICCREM 2017 vi Contents Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved Research on Collaborative Management of Prefabricated Construction: Integration of Design and Construction Xuetong Wang, Yuan Huang, Weirui Xue, and Chen Lu Research on BIM-Based Assembly Sequence Planning of Prefabricated Buildings 10 Yaowu Wang and Zhenmin Yuan The Environmental Performance of Prefabricated Building and Construction: A Critical Review 18 Kailun Feng, Yaowu Wang, and Weizhuo Lu Research on the Influencing Factors of the Remaining Control Configuration of PPP Project: Based on DEA Model Analysis 43 Lizhong She and Tao Li The Risk Assessment of Traditional Village Conservation Project Based on the PPP Mode 52 Chao Wang, Jun Fang, and Chunhong Wu Pricing for the Basic Educational PPP Project: Two Stages Game Theoretical Analysis 62 Hui Bai and Bing Li The Applied Exploration of Big Data Technology in Prefabricated Construction Project Management 71 Zixin Han and Yaowu Wang Major Barriers to Different Kinds of Prefabricated Public Housing in China: The Developers’ Perspective 79 Chen Cheng, Kaicheng Shen, Xiaodong Li, and Zhihui Zhang Job Stress and Job Satisfaction of Workers in Traditional Cast-in-Situ Projects and Industrialized Projects 89 Xiaodong Li, Yifan Geng, Ziyang Song, Qianli Ma, and Xiangdong Tian A Life-Cycle Analysis for Both Energy and Cost of Precast Concrete Building Components: A Process-Based Model 97 Yaowu Wang, Shiwei Chen, and Jiabin Zhang © ASCE ICCREM 2017 Situation, Problems, and Countermeasures of Urban Utility Tunnel Based on Public–Private Partnership 109 Xuetong Wang, Tao Wang, Chen Lu, and Weirui Xue Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved The Risk Evaluation of Beautiful Village Construction Project Based on PPP Mode 119 Chunhong Wu, Jun Fang, and Chao Wang Research on Information Flow of Prefabricated Building Supply Chain Based on BIM 131 Jing Bian and Qinghua He A Review on Current Research about Construction Industrialization 139 Wenbo Huangfu and Xiaolong Xue Study on Factors Affecting Construction Schedule of Prefabricated Buildings Based on PCA 147 Junwu Wang and Wenshuang Li Evaluating Demand Guarantee for PPP Projects by Real-Option Pricing 155 Xiaoling Chu, Shouqing Wang, and Ke Feng SD-Based Research on Industrialized Construction Supply Chain 163 Hongbing Li and Qin Mao Analysis on the Main Relationship in Industrial Chain of Industrialized Building 173 Wang Liang and Shoujian Zhang Research on Existing Problems of Fabricated Building in China 180 Wei Huang, Yan Lei, and Shoujian Zhang Research on Factors Influencing Collaborative Innovation of Stakeholders in Construction Industrialization 189 Yingbo Ji, Fuyi Yao, and Fadong Zhu Evaluation of Industrialized Construction Capability of Construction Enterprises Based on AHP-Entropy Method 199 Yudan Dou and Xiaolong Xue Analysis of Non-Value-Adding Activities in Prefabricated Building Construction Project: Case Study 207 Yan Liu, Xin Zhang, and Fadong Zhu © ASCE vii ICCREM 2017 Research on Hoisting Sequence Optimization for Prefabricated Components Based on Genetic Algorithm 217 Gaoyu Yue, Kailang Huang, and Jingjing Yang Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved Steel Structure Construction Industrialization in China: Literature Review and Future Direction 224 Jingyu Yu, Longyu Zhang, Jingfeng Wang, and Xuebei Pan Research on Developer’s Willingness to Use Precast Concrete System Based on Structural Equation Modeling 234 Tingting Chen, Chengshuang Sun, and Lijuan Luo A Comparative Study on the Transformation Trend of Chinese Urban Trail Transit PPP Models 247 Yunshi Niu and Yuan Zhang The Research Status and Prospects of Public-Private Partnership in China 256 Lizhong She and Jia Li Research on the Standard System Framework of Industrialized Buildings Based on System Analysis Methodology 262 Kangning Liu and Shoujian Zhang Multivariate Analysis of PPP Project Risk Based on System Dynamics 276 Liangping Xu, Xianwei Meng, and Yue Cao Risk Identification of Shield Tunnel Construction Based on Failure Knowledge 289 Ming Xue and Hong Zhou Research on Risk Management of PPP Financing Project in China 299 Yunshan Su Research on the Performance Evaluation of the Contract Governance in the PPP Mode Based on AHP 309 Lizhong She and Sha Tang China’s Underground Comprehensive Utility Tunnel Project of PPP Mode Risk Identification 318 Xianhua Zhou, Hongting Pan, and Yunfei Shen Critical Risk Identification for PPP Waste-to-Energy Incineration Projects in China: A Multiple Case Study 328 Chenjunyan Sun, Caiyun Cui, and Yong Liu © ASCE viii ICCREM 2017 Study on the Decision Making of Concession Period for PPP Highway Based on Subsidies of Government 337 Junwu Wang, Qianjin Wang, and Jingtao Feng Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved Critical Success Factors of Applying PPP to Construction of New Campuses for Public Colleges in China 346 Jiali You and Weiyou Wu Construction of Rural Fire Risk Assessment System Based on Analytic Hierarchy Process: A Case Study of Tuyang Village in Shenzhen 353 Hongmeng Kang, Fengyong Zhai, and Wei Gao Negotiation Transaction Cost of PPP Based on the Cumulative Prospect-Evolutionary Game Model 360 Fangfang Liu, Yousong Wang, Hui Yan, Hongyang Li, and Yan Zhang Study on the Risk Evaluation Model of Utility Tunnel Project under a PPP Mode 371 Weiming Wang and Jun Fang Comparative Study on BOO Project Risk Evaluation Based on Ownership Perspective 382 Yiping Zhang and Jun Fang The Division of Roles in Operation Models for PPP Elderly Housing Projects 396 Lin Yang, Yi Zhou, and Liang Tan © ASCE ix ICCREM 2017 389 x113 = f1 (d11t ) = f (3) + f (4) + f (4) + f (5) + f (4) = 3.3333 t =1 x114 = 4.5; x115 = Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved Table 3.The Risk Index Weight Calculation Results of the Case Destination Criterion layer Weight Index layer layer Political risk (B1) 0.1570 Policy Stability C11 Approval delays C12 Modification of law C13 0.1302 Interest rate C21 Financial risk (B2) Currency inflation C22 0.1171 Construction cost C31 Completion risk (B3) Quality C32 The risk Schedule delays C33 evaluation of 0.2043 Operating costs C41 Incubator for Operational risk (B4) Market demand C42 small and medium-sized Market competition C43 enterprises Management level C44 project 0.1097 Transfer delay C51 Transfer risk (B5) Acceptance check C52 0.1680 Public credit C61 Credit risks (B6) Private credit C62 Third part credit C63 Environmental risk 0.1137 Force majeure C71 (B7) Environmental protection C72 weight 0.4424 0.1637 0.3939 0.5451 0.4549 0.5133 0.2738 0.2129 0.2010 0.1744 0.3033 0.3213 0.2500 0.7500 0.3301 0.4493 0.2206 0.7575 0.2425 So the whiting value of index C11 is x11 = x11e = 12.3333 so the corresponding e =1 grey weight matrix is r11=(0,0.1125,0.25,0.3375,0.3,0.4424) Similarly, we can get the grey weight matrix of index C12 and C13, r12=(0,0.184,0.3190,0.2761,0.2209), r13=(0,0.2256,0.3008,0.2632,0.2105), that is to say ,the grey weight matrix of criterion layer B1 is solved 0 0.1125 0.2500 0.3375 0.3000 r1 = 0 0.1840 0.3190 0.2761 0.2209 0 0.2256 0.3008 0.2632 0.2105 And by this analogy, the two schemes’ grey weight matrixes of each index can be listed as shown in Table According to the method mentioned in section 2.4 to make a comprehensive evaluation of criterion layer and destination layer, we will take index B1 of Scheme A (BOO mode) as an example © ASCE expert5 3 3 5 3 expert1 3 3 3 2 4 3 Scheme B: BOO mode expert2 expert3 expert4 3 2 1 2 2 2 2 2 3 3 3 5 4 4 3 2 Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved expert1 3 3 3 4 1 3 Table 4.The Results of Quantitative Evaluation Index Scheme A: BOT mode expert2 expert3 expert4 4 3 3 2 2 2 2 5 4 5 0 1 3 3 2 C11 C12 C13 C21 C22 C31 C32 C33 C41 C42 C43 C44 C51 C52 C61 C62 C63 C71 C72 0 0.1125 0.2500 0.3375 0.3000 0.1637， 0.39390 ) 0 0.1840 0.3190 0.2761 0.2209 B1 = Wi • Ri = ( 0.4424， 0 0.2256 0.3008 0.2632 0.2105 = ( 0, 0.1687, 0.2813, 0.2982, 0.2518 ) expert5 3 3 3 3 4 3 3 © ASCE 390 ICCREM 2017 Index layer 0 0 0.0768 0 0 0 0.4380 0.4380 0.1525 0.0746 0.0762 Low Scheme A :BOO mode Relatively Medium Relatively high low 0.1125 0.2500 0.3375 0.1840 0.3190 0.2761 0.2256 0.3008 0.2632 0.2558 0.3167 0.2375 0.1921 0.2817 0.2497 0.2256 0.3008 0.2632 0.2558 0.3167 0.2375 0.2689 0.2817 0.2497 0.0418 0.2510 0.3556 0.0405 0.2703 0.3649 0.2086 0.3800 0.2086 0.3800 0.2190 0.1460 0.1095 0.2190 0.1460 0.1095 0.1906 0.2795 0.2097 0.0786 0.2883 0.3342 0.2239 0.2985 0.2239 0.2256 0.3008 0.2632 0.2668 0.2795 0.2097 0.3000 0.2209 0.2105 0.1900 0.1997 0.2105 0.1900 0.1997 0.3515 0.3243 0.4113 0.4113 0.0876 0.0876 0.1677 0.2988 0.1791 0.2105 0.1677 High 0 0.0785 0.1594 0.0762 0 0 0 0 0 0.0746 0.0762 Low Table 5.The Grey Weight Matrixes of Index Layer’s Indexes of Two Schemes C11 C12 C13 C21 C22 C31 C32 C33 C41 C42 C43 C44 C51 C52 C61 C62 C63 C71 C72 Scheme B:BOT mode Relatively Medium Relatively high low 0.2148 0.3341 0.2506 0.2558 0.3167 0.2375 0.2356 0.2618 0.2356 0.2789 0.2390 0.1793 0.2668 0.2795 0.2097 0.2256 0.3008 0.2632 0.2985 0.2985 0.2239 0.1840 0.3190 0.2761 0.0811 0.2703 0.3243 0.2985 0.2985 0.2239 0.2148 0.3341 0.2506 0.1840 0.3190 0.2761 0.0405 0.2703 0.3649 0.2510 0.3975 0.0786 0.2883 0.3342 0.2985 0.2985 0.2239 0.2239 0.2985 0.2239 0.2256 0.3008 0.2632 0.2668 0.2795 0.2097 High 0.2005 0.1900 0.1885 0.1434 0.1677 0.2105 0.1791 0.2209 0.3243 0.1791 0.2005 0.2209 0.3243 0.3515 0.2988 0.1791 0.1791 0.2105 0.1677 Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved And by this analogy, the two schemes’ grey weight matrixes of criterion layer and destination layer can be figured out which are shown in Table Finally, we can get the specific value of risk quantitative evaluation of two schemes as follow T Z A = ( 0.0659, 0.1633, 0.2631, 0.26980.2379 ) ã (1, 2,3, 4,5) = 3.4506 â ASCE 391 ICCREM 2017 0.0349 0 0.4380 0.0668 0.0185 0.0659 T Z B = ( 0.0256, 0.2018, 0.2913,0.2629,0.2184 ) • (1, 2, 3, 4,5) = 3.4468 0.1633 3.4506 0.2631 0.2698 0.2379 0.0256 0.2018 3.4468 0.2913 0.2629 Table 6.The Grey Weight Matrixes of Criterion/Destination Layer of Two Schemes Scheme A:BOO mode Scheme B:BOT mode Criterion Relatively Relatively Relatively layer Low Medium Relatively high High Low Medium Low Low High 0.1687 0.2813 0.2982 0.2518 0.0309 0.2297 0.3028 0.2425 0.2268 0.3008 0.2430 0.1944 0.1215 0.2734 0.2575 0.1931 0.2431 0.3011 0.2533 0.2026 0.2367 0.3040 0.2552 0.0155 0.2279 0.3725 0.3841 0.1926 0.3102 0.2689 0.2190 0.1460 0.1095 0.0876 0.0101 0.2559 0.3893 0.1476 0.2877 0.2688 0.2291 0.0165 0.2095 0.2951 0.2603 0.2356 0.2956 0.2502 0.2001 0.0185 0.2356 0.2956 0.2502 B1 B2 B3 B4 B5 B6 B7 Destination layer Value High 0.1940 0.1545 0.2041 0.2282 0.3447 0.2186 0.2001 0.2184 Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved The comparison result According to the Table 5, Table and the principle of maximum membership degree, we can find that the risk levels of approval delays, modification of law, construction cost, quality, schedule delays, third part credit, force majeure and environmental protection in this two schemes are all belong to the category of Medium However the risk levels of policy stability, interest rate, market demand, market competition, management level, private credit in BOO mode are obviously bigger than those in BOT node, while the transfer delays risks, acceptance check risks and public credit in BOO mode are quite tiny Those in turn affect the high risks level of BOO mode in political risk, operational risk in criterion layer, while the transfer risk is negligible © ASCE 392 ICCREM 2017 ICCREM 2017 393 In a word, it can be seen from the evaluation results that the overall risk of BOO mode is higher than the BOT mode in this Incubation project Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved ANALYSIS OF THE IMPACT OF OWNERSHIP ON EVALUATION RESULTS PROJECT RISK Since the essential difference between BOO mode and BOT mode is the ownership of project, so we can try to analyze the reasons for the above comparison results from the perspective of ownership (1) The transfer risk is minimal under BOO mode, while it is quite big in BOT mode Due to the privatization of BOO mode, there has no stage for assets delivering, and the project company will continue to own and operate the project after the concession period Therefore, it is obvious that the risks of acceptance check and transfer delay are negligible for the public sector However, from the view of the private sector, the risk of project residual value will affect the subsequent profitability of the project, so the maintenance awareness of the project assets will be stronger (2) The credit risk has a greater impact on BOO mode Because of the privatization of ownership in BOO mode, the project company could obtain a longer earning cycle and wider income channels (the project company has the right to financing by mortgaging on project asset) So in order to ensure the public welfare of the project and restrict the private sector to profiteer, the public sector want to keep the concession period longer than the BOT mode, which is concentrated in 20 to 30 years The extension of the concession period makes the project face more uncertainties, and it would be more difficult for the government to supervise Therefore, the privatization of the ownership will lead to the expansion of credit risk, policy stability risk and interest rate risk (3) The operational risk has the greatest impact on BOO mode In this empirical case, a relative open market environment and a certain size of demands are the prerequisite for choosing BOO mode Since the user can choose alternatives, the risks of competition and management level will become more prominent Although the government will give some tax concessions and price subsidies, under the circumstances that the public sector is not allowed to promise a minimum profit, so the private sector should have greater power of cost control and operational management to pursue higher returns Based on the analysis hereinabove, owe to the privatization of ownership in BOO mode, we need to pay more attention to the risks of operation, credit and politics Concretely speaking, it is necessary for the public sector to choose a high-quality partner, and in the course of the practice, the two sides should try their best to maintain a long-term, stable and effective cooperative environment to enhance the risk-resistant capacity of the whole project At the same time, the public sector should strengthen the performance assessment and supervision degree, so as to ensure the quality of public services © ASCE ICCREM 2017 CONCLUSION Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved Under the condition that the existing research results of BOO mode is very limited, with the help of the grey system theory and method, this paper take the Incubator for small and medium-sized enterprises in L city as an empirical case to carry out risk evaluation study, compare the risk evaluation results between BOO mode and BOT mode, furthermore analyze the differences from the perspective of ownership In the end, put forward the key points which should be realized in the implementation process of BOO mode This paper is a beneficial exploration for the risk management of BOO mode, and the research results can play a positive role in the further study REFERENCES Cui, Y (2016) Research on PPP Project Risk Based on Grey System Theory Dongbei University of Finance and Economics, Dalian, China 1-55 (in Chinese) Feng, X and Zheng, S (2016) “Research on investment risk evaluation of PPP project for the old real estate.” Journal of Engineering Management, 3(2016), 148-152 (in Chinese) Gandomi, N and Rezai, S (2016) “Considering of BOO contract in project management & its role in developing of privatization.” Journal of Management, Economics & Accounting, 7(4), 1-12 He, Z (2007) Application of Fault Tree Technology in Risk Analysis of Construction Project Tongji University, Shanghai, China, 1-60 (in Chinese) Li, Z and Tian, Z (2007) “Discussion on exploiting iron ore resources by BOO financing mode and contract mining.” Journal of Mining Express, 26(1), 48-51 (in Chinese) Lin, T and Chang, M (2006) “Risk identification, distribution and change analysis of BOT project in sewage treatment plant.” Journal of China Water & Wastewater, 22(18), 72-76 (in Chinese) Liu, S., Yang, Y and Wu, L (2014) The grey system theory, Science Press, Beijing (in Chinese) Miao, J and Zhang, J (2006) “Monte carlo technology in risk assessment of investment projects.” Journal of Statistics & Decision, 15(2006), 135-136 (in Chinese) Robles, R.R (2001) “Sacramento’s DBOO solution: a mutually beneficial approach to bio-solids management.” Journal of Proceedings of the Water Environment Federation, 9(2001), 435-450 Sobhiyah, M.H., Bemanian, M.R and Kashtiban, Y.K (2009) “Increasing VFM in PPP power station projects: case study: rudeshur gas turbine power station.” International Journal of Project Management, 27(5), 512-521 Song, J, Song, D and Jiang, S (2010) “Study on risk sharing of BOT project for municipal solid waste incineration.” Journal of China Soft Science, 7(2010), 71-79 (in Chinese) Tong, J (2010) Study on Risk Management of Tianjin Xinquan Seawater Desalination BOO Project Jiao Tong University, Shanghai, China, 1-50 (in Chinese) © ASCE 394 ICCREM 2017 Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved Wang, L (2003) “Comparative study on BOT model and its main forms.” Journal of International Economic Cooperation, 11(2003), 43-46 (in Chinese) Wang, S (1999) “Analysis of key contract clauses in China’s BOT project.” Journal of Construction Engineering and Management, 125(3), 190-197 (in Chinese) Wang, W., Liu, L and Li, J (2016) “Research on risk assessment of PPP infrastructure project based on PCA-BP method.” Journal of Friends of Accounting, 7(2016), 56-59 (in Chinese) © ASCE 395 ICCREM 2017 396 The Division of Roles in Operation Models for PPP Elderly Housing Projects Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved Lin Yang1; Yi Zhou2; and Liang Tan3 Lecturer, Dept of Construction Management, Wuhan Electric Power Vocational and Technical College, Wuhan 430070, China E-mail: 515965210@qq.com Lecturer, Dept of Construction Management, Wuhan Electric Power Vocational and Technical College, Wuhan 430070, China E-mail: 292282242@qq.com Senior Engineer, Dept of Information System, China Ship Development and Design Center, Wuhan 430064, China E-mail: 51996975@qq.com Abstract In the situation of an aging population structure and increasingly worsening municipal and local treasury bonds, and with the senior housing as the objective of study, application of public–private-partnership (PPP) mode in senior housing was proposed in this paper First, features of relevant projects are analyzed, involving the operation service level, risk of liability and government regulation, etc With old-age care services as the core, it is more important to manage such projects after completion Second, the roles of investors, developers, and operators are separated As major research objects, operation models are classified into entrusted joint operation, pure leasing, and entrusted operation, following the main procedures of project investment, development and operation, and analyzing its benefit and risk Last, a comparison is made between advantages and disadvantages of potential government partners like commercial banks, real estate developers, insurance, and health care businesses under the three operation models, to provide references for government decision-making on selecting operation models and partners INTRODUCTION By the end of 2015, the population over 65 will be more than 143.86 million which will account for 10.47% of the total population And the aging population will increase to 319 million from 2015 to 2050 Its growth rate is predicted to be 3% which is times that of the total population with an increasingly worsening trend and China will step into an aging society (Wu and Dang 2014) The national condition where the aging population grows rapidly and Chinese citizens turn old before getting rich makes China’s pension issues abnormally severe Hence, the Chinese government establishes a fundamental pension policy based on “home-based care for the aged, social provision care for the aged and institution care for the aged” © ASCE ICCREM 2017 PPP MODEL AND ITS FEASIBILITY ANALYSIS IN THE SENIOR HOUSING Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved PPP pattern overview PPP pattern (public -private partnership) refers to kind of cooperative mechanism established by contract based on risk sharing and profit sharing principle (Moody 2014) The core idea of PPP is “Cooperation”, which is to give full play to the advantages of public sectors and private sectors, optimizing the allocation of resources through sharing profits and risks jointly The feasibility analysis of PPP model in the development of senior housing (1) The bound of government investing in senior housing projects Senior housing which was usually provided by traditional pension service, a kind of welfare service, normally based on nursing home and supported by government However, in recent years China has released quite a lot city investment bonds called “would-be municipal bond” In 2016, national city investment enterprise bonds released have exceeded more than 1.77 trillion The expansion of release amount is accompanied by increasing default risk of bonds; if the PPP pattern successfully displaces the financing pattern directed mainly by city investment, the development space in the future will be tremendous Vigorous promotion of PPP projects will introduce private sectors’ capital which will help the government release capital constrain to a great extent (Spackman 2002; Maskin and Tirole 2008) When the government bears heavy debt burden, PPP pattern’s application will be more universal (2) The possibility of private capital being left unused in a huge amount and getting into the field of senior housing construction projects With the development of Chinese economy, the untapped private capital is expanding and developing at an unprecedentedly speed While using PPP pattern to conduct senior housing, the government’s economic targets aim at bringing society the maximum economic and social benefit through investing Both the governmental and private capital can formulate reasonable and effective gain sharing, property right sharing and risk sharing mechanism so as to meet the characters and economic targets of private capital This paper mainly studies the operational management model of the PPP senior housing project and the role of potential government partners like commercial banks, real estate developers, insurance and health care businesses under the operation models FEATURES OF THE SENIOR HOUSING PPP MODE In China, the Public-Private-Partnership (PPP) mode is used frequently in the infrastructure field, with rich experience accumulated However, there is no precedent for the use of the PPP mode in the field of senior housing It is because though some enterprises want to invest, certain characteristics of senior housing projects make them not dare to make many attempts To sum up, senior housing projects show the following characteristics: Firstly, there are greater risks in the operation period of projects Secondly, they will face more uncertainty Last but not least, there are higher demands for the software service level of projects For the large number of old people who are consumers of senior housing PPP © ASCE 397 ICCREM 2017 Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved projects, they are concerned more about guaranteed nursing and medical services than luxurious supporting facilities or ownership of properties, which depend on the operation and management level at the later stage of projects Therefore, senior housing PPP projects are different from ordinary infrastructure projects in that the government aims not only to solve the problem of financing, but also to improve the quality of software services, such as operation and management level and service efficiency Hence, project managers should place the operation and management of projects after completion in a more important position AN ANALYSIS OF THE “DEVELOPMENT: OPERATION” MODEL OF SENIOR HOUSING PPP PROJECTS At present, many problems in senior housing in China still mainly result from the unclear definition of duties and ambiguous division of work Many senior housing projects are controlled exclusively by developers, from financing to construction and then to operation, making it difficult to be professional in everything In the meantime, because the profit of traditional real estate development projects is much higher than that of senior housing projects, developers have no motivation for long-term operation of such projects (Xia 2014) In the category of the incomplete contract theory, Hart (2003) established the basic analytical framework of PPP based on the famous HSV (1997) model, to first stress the binding relationship between construction and operation in PPP contracts (Hart 2003) As no agreement can be concluded on construction investment, when it can reduce operational costs and improve service efficiency, PPP has incentive advantages; On the contrary, if investment degrades service quality significantly while reducing operation costs, separate contracts will be more appropriate In view of the characteristics and existing problems of senior housing PPP projects, we realize that only by distinguishing their roles can investors, developers and operators play their own roles and give full play to their specialties In combination with the situation of China and existing successful experience abroad, the following model of “investment-development-operation” was presented in this paper The entrusted joint operation model The whole process of senior housing PPP projects includes the stages of investment decision-making, construction and operation Now, a brief analysis is made on the main content and key points of each stage under the entrusted joint operation model, as shown in Figure (1) The investment stage Under this model, the investor which is as a major shareholder first start a Special Purpose Corporation (SPC), to serve a specific senior housing project exclusively At this time, government departments (or state-owned enterprises ) and private enterprise investors (including real estate developers) can join the corporation as shareholders, to hold shares of corresponding proportions according to the importance of the roles they play In the early stage of the project, the investor is responsible for the financing, site selection and positioning of the old-age care real estate, and government departments help the SPC with financing and give suggestions and support on old-age care policies The real © ASCE 398 ICCREM 2017 399 Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved estate company can provide suggestions on project positioning and site selection those relevant assistance for the investor, based on several years of experience in real estate development projects Goverment Investment Contract Investors Parternership investment Private enterprises Developers Selling shares 1.Financing policy support； 2.Pension policy advice and support SPC Special purpose corporation Investment Stage Developer:Advice and help on the project site selection and location Construction Contract Designing, onstructing,consultating Senior Housing Development construction project Stage Operation Management Contract Operators Operation Stage Operating Managing Figure 1.An illustration of the entrusted joint operation model of senior housing PPP projects (2) The development stage After the project enters the construction stage, the developer exercises all the duties on behalf of the owner, to take full charge of construction management and give play to the developer’s experience and advantages in real estate development The government can give instruction in relevant specifications and open a fast track to finish formalities © ASCE ICCREM 2017 Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved (3) The operation stage After entering the operation stage, the developer can sell part of shares to earn profit, and the operator can join and become a shareholder of the SPC by acquiring equity from the developer At this time, the investor as a major shareholder can adjust the equity ratio of shareholders according to the importance and contribution of participators As senior housing projects focus on old-age care services, they would like to select highly specialized and experienced operators And the SPC entrusted operator should be fully responsible for project operation at the late stage, providing services to meet the needs of the aged in life, entertainment and health care, sharing dividends annually according to their share proportions in the corporation The pure leasing model In the early stage, this model is similar to the entrusted joint operation model Their difference lies in that the operator will no longer join the SPC to become a shareholder after the retreat of the developer, and the investor will lease the right of project operation completely to the operator, who will assume sole responsibility for the profits and losses of the project and independently bear operational risk, after paying a certain amount of rent annually to the investor The investor can get stable returns each year, and the operator can fully take the initiative and work actively Nevertheless, this also requires the operator to be more skilled in operation The entrusted operation model This model shares similarities with the pure leasing model in the early stage, and still allows the operator to take charge of providing medical care services for the aged in the late stage It is different in that the operator will charge the investor some management fees, and the investor earns profit and correspondingly has to bear operational risks Under this model, the operator can get stable incomes, but the investor has to take the operational risks in place of the operator, which requires the investor to sufficiently understand and trust in the operational ability of the operator A comparison of risks and benefits under the three models Under the entrusted joint operation model, participators share benefits and risks according to their proportion of equities; in the pure leasing model, the investor gains steady returns and bears extremely low risk, and the project risk is mostly taken independently by the operator; in the entrusted operation model, the operator gains steady incomes, while the investor has to take all the operational risk of a project There are advantages and disadvantages in the three models, the specific selection of which should be determined by the risk preference of participators, as shown in Table Table 1.Comparison of Risks and Benefits under the Three Models Mode Risk Profit Entrusted joint Share risk based on equity and Distribute profit according to the operation contract equity Pure leasing Investors bear very low risk Investors receive stable rental income Operators assume major risks Operator access to operating profit deduct rent Investors assume all of the Investors earn most of the profits Entrusted operation operational risk Operators obtain a stable income © ASCE 400 ICCREM 2017 ANALYSIS OF ADVANTAGES AND DISADVANTAGES OF PARTNERS IN SENIOR HOUSING PPP PROJECTS Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved The major process of senior housing PPP projects mainly includes three stages, investment-development -operation The key to adopt the PPP mode lies in that the investors working collaboratively with the government can be commercial banks, real estate development enterprises; insurance and medical care companies, which participate in the three different stages independently or jointly The advantages and disadvantages of commercial banks Banks begin to participate in the stage of preliminary project argumentation Through participation in the whole process, they can improve initiative, provide all-dimensional services for customers, gain long-term returns and enhance the level of risk prevention and control However, as relevant laws and regulations are not complete in China, banks will face a series of problems in the continuity of policies and regulations, feasibility of project operation, and the effectiveness of risk mitigation (Deng 2014) The advantages and disadvantages of real estate development enterprises Real estate development enterprises have rich experience in the site selection and positioning, planning and design, and construction of projects Compared with the commercial real estate they used to invest in, the investment in senior housing yields a low rate of returns, gets returns after a long period of time, and faces greater risks Due to these factors, it is highly possible for some development enterprises to sell a project directly after its completion, for the purpose of getting returns more quickly And such senior housing cannot serve old-age customers effectively or guarantee their personal interests The advantages and disadvantages of insurance companies In terms of diversified old-age care services, insurance companies have a great variety of old-age care businesses and are familiar with the needs of the aged, which enables them to provide various targeted old-age care services in the stage of operation As for the control of project operating costs, they have accumulated rich experience in the estimation of medical expenses and compensation for nursing fees, which can reduce operational risk Moreover, they are skilled in achieving investment goals through long-term returns, which is relatively consistent with the nature of senior housing Nevertheless, they also have deficiencies The development and construction of real estate are not what they are specialized in, but their successful construction and operation of senior housing shall be based on these two fields (Wu 2015) The advantages and disadvantages of medical care companies Professional medical facilities and medical nursing staff are key to the selection of different senior housing projects by the aged Meanwhile, they can apply for medical qualifications if it is permitted according to national policies, to become a medical insurance designated unit, thus allowing individuals to get reimbursement for some medical treatment and nursing expenses, reducing the economic burdens on the aged Therefore, old people are more willing to choose this kind of senior housing projects © ASCE 401 ICCREM 2017 402 Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved The downside is that such nursing companies focus on providing medical services for the aged to keep them physically healthy, rather than comprehensive services in the aspects of entertainment, mental care and daily care Based on analysis of the advantages and disadvantages of the aforesaid four types of enterprises, a comprehensive comparison of their advantages was made, as shown in Table Table 2.Analysis of the Advantages of the Four Types of Enterprises Enterprise type Enterprise Capacity Commer cial bank and √ Financial strength financing ability Project positioning ability Project planning and design ability Risk control ability Medical nursing ability Service product design ability Insurance enterprise √ Real estate enterprise Medical care company √ √ √ √ √ √ √ √ Due to the diversity of senior housing projects, the government must apply the mode flexibly by considering various specific factors, when selecting different partners The selection of partners should not be based just on the advantages and disadvantages of different types of enterprises, but also considered according to the characteristics of a project and its operation model Now, in combination with the “Investment-Development-Operation” model of senior housing PPP projects, discussion is made on the representative types of enterprises that could participate in the three stages (1) Investors: major investors include not only banks but also the financial institutions such as real estate enterprises, insurance companies and trust funds (Yue and Hu 2014), and joint construction based on diversified financing from insurance companies, banks, trust funds, real estate investment funds (REITS) and private funds is conducive to the share of risks and benefits among participators, and the building of a complete financial ecosystem (2) Developers: developers mainly include real estate development enterprises, which are responsible for the development, construction and management of senior housing PPP projects, strictly monitor and control the standard and level of construction, and shift attention from the sale of buildings to the increase and maintain the value of projects in the full life cycle (3) Operators: operators are mainly specialized business service companies, medical care enterprises and insurance companies, which take charge of the services and management, hierarchical medical care, basic life culture and entertainment , and vacationing and recuperation etc © ASCE ICCREM 2017 CONCLUSIONS Downloaded from ascelibrary.org by RMIT UNIVERSITY LIBRARY on 01/03/19 Copyright ASCE For personal use only; all rights reserved In view of the unsatisfactory quality and level of services in senior housing projects, as well as the lack of such projects, the PPP mode was presented for partnerships with the government, to give play to the flexible market operation and management models of enterprises combined with the effective guidance of the government With regard to the selection of enterprises, the government can choose one type of enterprises for joint development, or several different types of enterprises to jointly participate in construction, so as to relieve the financial and social pressure on the government in the process of population aging in China, meet the needs of old people in the future and maximize social interests REFERENCES Deng, Y (2014) “Business opportunities and related strategy in commercial banks of the PPP mode.” Engineering Economy, (9), 63-68 (in Chinese) Hart, O (2003) “Incomplete contracts and public ownership: remarks and an application to public-private partnership.” Economic Journal, 486(113), 69-76 Maskin, E and Tirole, J (2008) “Private partnerships and government spending limits.” International Journal of Industrial Organization, 2(26), 412-420 Moody, D (2014) “Public-private partnerships: global P3 landscape.” (Sep.08,2014) Spackman, M (2002) “Public-private partnerships: lessons from the British approach.” Economic Systems, 3(26), 283-301 Wu, P (2015) “Research on partner selection in PPP project for pension institutions real estate.” Construction Economy, 37(7), 77-80 (in Chinese) Wu, Y.S and Dang, J.W (2014) Blue book of aging, Social Sciences Academic Press, Beijing (in Chinese) Xia, C.C (2014) “Role sharing of senior housing participants in PPP model.” Enterprise Vertical, (6), 82-83 (in Chinese) Yue, C.X and Hu, T (2014) “The innovation of the business model of senior housing based on the integration of industry value chain” Exploration of Economic Problems, (12), 36-42 (in Chinese) © ASCE 403 ... rights reserved ICCREM 2017 PREFABRICATED BUILDINGS, INDUSTRIALIZED CONSTRUCTION, AND PUBLIC- PRIVATE PARTNERSHIPS PROCEEDINGS OF THE INTERNATIONAL CONFERENCE ON CONSTRUCTION AND REAL ESTATE MANAGEMENT... four parts: Prefabricated Buildings, Industrialized Construction and PPP Industry Regulation and Sustainable Development Real Estate and Urbanization Project Management and Construction... emission of prefabricated office buildings And system dynamic was used in Wang and Tao (2015) and Li et al (2014) to understand the connection between construction waste generation and various prefabricated