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Infrastructure Investment An Engineering Perspective

Langue : Anglais

Auteur :

Established Deterministic Investment Appraisal versus Uncertainty in Investment

When it comes to investing in an infrastructure project, the conventional approach is to evaluate risk through a deterministic approach. Infrastructure Investment: An Engineering Perspective, however, takes on uncertainty in investment. Of interest to engineering consultants, government departments, financial institutions, or anyone involved in investment in infrastructure, this text provides the necessary tools for the analysis and appraisal of investment in infrastructure and other assets with uncertain futures.

It factors in the finance and engineering of assets such as roads, buildings, bridges, dams, pipelines, railways, ports, seawalls, wastewater treatment facilities, and addresses future demand, operating costs, maintenance costs, and other lifetime and investment parameters in both financial and non-financial terms. It considers the impact of climate change and the possible use of adaptive and flexible solutions capable of responding to changed futures, as well as how such uncertainty affects the future performance of these investments. The book also incorporates illustrated case studies and Markov chains to model an investment.

A pivotal work containing 11 chapters, this text provides:

  • An original contribution to feasibility analysis under uncertainty
  • A systematic and ordered treatment of capital investment in infrastructure
  • A structured flow, from a systematic treatment of conventional deterministic approaches through to a complete treatment incorporating uncertainty

Infrastructure Investment: An Engineering Perspective details investment analysis in the presence of uncertainty, and is beneficial to students, academics, and practitioners dealing with decision-making in infrastructure and similar investments.




Part I - Deterministic

Benefits, costs and time value

Single and multiple investments




Present worth

Annual worth

Internal rate of return

Payback period

Benefit: cost ratio

Example calculations

Appraisal: Extensions and comments


Apparent conflict

Negative benefits


Choice of interest rate


Nonfinancial matters/intangibles

Part II - Probabilistic



Preferred analysis framework

Measures of viability and preference


Obtaining estimates

Summary probabilistic appraisal

Probabilistic cash flows



Interest rate

Probabilistic cash flows and lifespan

Example: Commercial investment

Managed investment in primary production

Clean development mechanism additionality

Multiple projects/ventures

Benefit: cost ratio

Real options


A present worth focus

Call and put options


Example calculation of option value

Real option types and examples



Outline demonstrations

Climate change and infrastructure

Adaptable, flexible infrastructure

Carbon farming initiative

Mining options

Fast-tracked projects

Convertible contracts

Financial options


A present worth focus

Further comment

European financial option

American financial option

Example calculation of option value

Example implementation of the approach given

Exotic options

Carbon options

Employee stock options

Random cash flows and interest rates


Probabilistic cash flows and interest rates


Investment analysis

Case study – gas transmission pipeline

Case study – index option


Variable and fixed rate loan equivalence

Markov chains and investment analysis


Markov chains

State choice and transition probability estimation


Payback period and internal rate of return


Bibliography and references

Students, academics and practitioners involved in decision-making on infrastructure, assets and similar investments.

Date de parution :

15.6x23.5 cm

Disponible chez l'éditeur (délai d'approvisionnement : 13 jours).

Prix indicatif 84,87 €

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