Modelling bid price for concession schemes under uncertainty: an optimization approach

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Title Modelling bid price for concession schemes under uncertainty: an optimization approach
Author Islam, MD Mainul; Mohamed, Sherif Ali Mohtady
Publication Title Proceedings of the 5th International Conference on Innovation in Architecture, Engineering and Construction
Editor Yasemin Nielsen
Year Published 2008
Place of publication Ankara, Turkiye (Turkey)
Publisher METU Press, Middle East Technical University
Abstract Bid price is one of the decisive factors in evaluation and awarding of concession schemes through competitive tendering. In conjunction with concession length and equity level, bid price defines promoters' profitability and competitiveness. Promoters, therefore, need to balance their own investment interest with that of the sponsors considering the abovementioned elements, which is even more challenging, since uncertainties are inherent in investment to concession schemes. This paper presents a novel optimization model to reveal a competitive bid price along with concession length and equity level, for maximization of promoters' bid-winning potential within uncertain concession investment opportunity, at the tendering stage. Fuzzy set theory and genetic algorithm are combined, and utilized as the building blocks for model development. Within the process of genetic algorithm-based optimization, uncertainties leading to imprecise estimation of investment parameters are accounted through fuzzy set theory. The model results enable promoter to offer a profitable, yet competitive financial proposal to sponsor. A real world concession scheme is used to demonstrate application of the proposed model.
Peer Reviewed No
Published Yes
Publisher URI http://www.lboro.ac.uk/cice/conferences/AEC2008/
Alternative URI http://www.lboro.ac.uk/cice/conferences/AEC2008/AEC2008-38.pdf
Conference name 5th International Conference on Innovation in Architecture, Engineering and Construction
Location Antalya, Turkey
Date From 2008-06-23
Date To 2008-06-25
URI http://hdl.handle.net/10072/24447
Date Accessioned 2009-02-20
Date Available 2009-09-07T23:32:20Z
Language en_AU
Research Centre Centre for Infrastructure Engineering and Management
Faculty Faculty of Science, Environment, Engineering and Technology
Subject PRE2009-Building Construction Management
Publication Type Conference Publications (Extract Paper)
Publication Type Code e3

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