1,720,973 research outputs found
Alarp criteria to estimate acceptability and tolerability thresholds of the investment risk
No full textAssessing the riskiness of investments in civil works is an integral part of the decision-making process. The main limitation is the absence, both in the regulatory landscape and in the literature of the sector, of threshold values that can guide the analyst in expressing an assessment on the acceptance of the investment risk. The aim of the paper is to define a risk management model that overcomes this gap by introducing acceptability and tolerability thresholds for project risk. The idea is to jointly use: (i) the As Low As Reasonably Practicable (ALARP) logic, from which the concepts threshold of acceptability and tolerability of risk derive, for the first time applied to assess the project risk in the civil field; (ii) the Capital Asset Pricing Model (CAPM) and statistical methods to define an innovative methodology for estimating the aforementioned threshold values. According to the proposed approach, these risk limit values can be specified according to both the investment sector and the socio‐economic context of the project. The implementation of the methodology in the civil company sector in Europe allows to validate the described model. The elaborations show that the financial performance of the project is widely acceptable if the Expected Internal Rate of Return is greater than 7.8%; unacceptable if the expected rate of return is less than 5.6%; and tolerable as an ALARP if the expected rate is between 5.6% and 7.8%. The estimated acceptability and tolerability thresholds can provide the economic operator with a more immediate and consistent evaluation of the triangular balance of risks, costs, and benefits. This allows the decision‐making process to become more rational and transparent
Urban water management in Italy: An innovative model for the selection of water service infrastructures
Get PDFClimate change affects the water cycle, in particular drought and flood risks are increasing, so there are intensifying impacts on water security and freshwater availability. According to the assessment of global risks provided by the World Economic Forum in 2015, water crises are at the top of the ranking due to their potential in causing negative impacts on the economy and welfare across countries. It is widely acknowledged that efficient water resource management plays a key role in reducing the vulnerabilities of communities and economies and the provision of drinking water and its preservation are keystone worldwide in the implementation of adaptation strategies. Mismanagement of water resources and competition for their use have worsened the consequences of water scarcity in countries which traditionally suffered from water scarcity and indeed started to cause water shortage in those countries in which traditionally water resources availability was consistent. In this respect the drought that occurred in Italy in summer 2017, proved the vulnerability of the Country and challenged water service providers in supplying high quality water and matching water demand with resource availability. This issue is particularly crucial in Italy, where there is a lack of investments in infrastructures and water facilities and an efficient management of water services is still far from being implemented. In recent years, the reports by the National Authority (ARERA) highlighted the urgent need for investments in new infrastructures and in maintenance of the existing ones and pushed towards the optimization of service operation. Due to ever stringent budget constraints and lack of financial resources, it is of primary importance to identify top priorities in ranking investments which accounts for service cost minimization, service quality maximization and environmental cost minimization. In this paper we propose an innovative theoretical valuation framework and implement a multi-criteria approach to support investment decisions in the water service sector. In detail we provide an AHP model to rank investments and select optimal investments in water infrastructure
An innovative risk assessment approach in projects for the enhancement of small towns
No full textThe Italian territory is characterized by a network of small municipalities with a weak economy, yet connoted by strong natural and landscape values. These are urban centres with often unique characters that deserve to be preserved from the dramatic consequences of the
widespread phenomenon of depopulation. Countering these trends requires the planning of economically sustainable
intervention strategies. With this research, we intend propose an innovative model of economic evaluation able to support the decision
maker in the risk analysis related to the projects for the enhancement of small towns. The idea is to introduce in the traditional evaluation
processes thresholds of acceptability and tolerability of risk so as defined by the As Low As Reasonably Practicable
(ALARP) logic. Widely consolidated for the evaluation of the safety risk, this principle can also find application
in the analysis of the investments in question, where it is necessary to operate a triangular balance between
risks, mitigation costs and prosecutable benefits. The case study demonstrates the effectiveness of the
model. In particular, the advantages for the public operator, which can consciously express a judgment on
risk of the initiatives to be financed, are relevant
Awareness Campaigns and Sustainable Marketing for an Efficient Use of Territorial Resources
No full textThe National Recovery and Resilience Plan (PNRR) is the document prepared by Italy to relaunch the economy after the COVID-19 pandemic and enable the country’s green and digital development. One of the many objectives of the PNRR is to ensure the sustainability of water resources and the improvement of the environmental quality of the water. With this work, we intend to define a procedural process for the assessment of the risk of lack of economic and financial sustainability in projects relating to Mission 2 Category 4 (Protection of the territory and water resources) of the PNRR. Specifically, the probabilistic tools for economic-financial risk assessment are integrated with the As Low As Reasonably Practicable (ALARP) principle, traditionally used in high-risk sectors to estimate acceptable and tolerable levels of health and safety. The work is part of the recent stream of literature that uses the ALARP principle to evaluate the economic and financial convenience of projects in the fields of construction and civil engineering. The model is applied to a potential project, financed through funds allocated to the PNRR, aimed at the construction of a new purification plant and the expansion of the existing sewer network in a medium-sized city. The application allows you to select the best design alternative in terms of both expected return and the probability of failure. © 2022, The Author(s), under exclusive license to Springer Nature Switzerland AG
Tolerability and acceptability of the risk for projects in the civil sector
No full textAssessing the riskiness of the investments is one of the key steps in the decision-making process. However, the lack in the legislative landscape of criteria for the acceptability of investment risk makes it difficult to express judgments of economic convenience based on shared criteria and objective data. In an attempt to overcome this regulatory gap, the aim of the paper is twofold: 1. to define minimum levels of acceptance of investment risk; 2. to outline an approach for the estimation of these threshold values. With reference to the first objective, acceptability and tolerability thresholds of risk are borrowed from the As Low As Reasonably Practicable (ALARP) logic. In accordance with this principle, which is widely used in safety risk, a risk is defined as ALARP if it falls within the above thresholds or if the costs for its mitigation appear disproportionate to the benefits that can be achieved. With regard to the second objective, the theoretical reference is the Capital Asset Pricing Model (CAPM) which defines how to assess the minimum expected return on an investment project with a given risk profile. Thus, the combined use of the CAPM and statistical survey tools makes it possible to estimate specific risk limit values as a function both of investment sector and with respect to the territorial context in which the project is located. Finally, the described approach is validated through an application to the civil enterprise sector in Campania Region (Italy)
Economic-Financial Sustainability and Risk Assessment in the Water Sector in Italy
No full textThe National Recovery and Resilience Plan (PNRR) is the document prepared by Italy to relaunch the economy after the COVID-19 pandemic and enable the country’s green and digital development. One of the many objectives of the PNRR is to ensure the sustainability of water resources and the improvement of the environmental quality of the water.
With this work, we intend to define a procedural process for the assessment of the risk of lack of economic and financial sustainability in projects relating to Mission 2 Category 4 (Protection of the territory and water resources) of the PNRR. Specifically, the probabilistic tools for economic-financial risk assessment are integrated with the As Low As Reasonably Practicable (ALARP) principle, traditionally used in high-risk sectors to estimate acceptable and tolerable levels of health and safety. The work is part of the recent stream of literature that uses the ALARP principle to evaluate the economic and financial convenience of projects in the fields of construction and civil engineering. The model is applied to a potential project, financed through funds allocated to the PNRR, aimed at the construction of a new purification plant and the expansion of the existing sewer network in a medium-sized city. The application allows you to select the best design alternative in terms of both expected return and the probability of failure
The Reorganization of Tariff Classes in the Integrated Water Service. An Optimizing Model for Define the Tariff Classes in Compliance with TICSI
No full textIn Italy, over the past few years, the fragmentation of the management system of water services, especially in the south of the country, has required big efforts on the National Authority (ARERA). Efforts aimed to achieve the homogenization of the methods and procedures adopted by the public or private regulated companies in the management of the integrated water service. Specific attention was paid to the reorganization of the tariff classes to bring together very different approaches within a single model subject to precise rules. In particular, through the TICSI (Integrated Text for the tariff classes of water service, approved by ARERA with resolution n. 665/2017/R/Idr), it was decided that the maximum number of tariff classes be equal to five; the ratio between the last class tariff and the first class tariff must be less than six; another constraint to be respected is about the revenue which must be the same with respect to the two-year period preceding the regulatory review. It is therefore a typical problem of optimizing an economic function. In fact, guaranteeing an unchanged revenue, the tariff classes must be defined by providing a facilitated class and a base class, where the facilitated has the social function of protecting the less privileged sections of the population and building, then, the other upper classes in relation to the manager’s objectives, to contingent political purposes and to user expectations. The proposed model tries to balance legislative indications with conflicting objectives achieved at different times
Estimative problems of the tertium genus: Application of a parametric model to the expropriation of areas with a public destination
No full textWith the Constitutional Court ruling 181/11, the muchdiscussed tertium genus was substantially legitimized
and consequently openly recognized by the Court of Cassation with a series of clear and recent ordinances.
This so-called third nature of land is perhaps better classifiable as another type of unbuildable category, compared
to that of the areas characterized essentially as agricultural. This is in compliance with the original interpretative
dichotomy, still in force by a law based on art. 37 of the Presidential Decree (DPR) 327/2001, between buildable
and unbuildable areas. The proclamation of the existence of unbuildable but
not even agricultural areas1, poses estimative problems in certain circumstances that are well-known to the operators
of the sector. However, in the case of areas that cannot be built on but
without an agricultural nature, the complex specie of those falling in areas destined for equipment (infrastructures
and hyperstructures) is considered and that are subjected to an exclusively public implementation initiative.
For these areas, the absence of a direct reference market puts a strain on the principle of compensation based on
the market value that was the key with which the ECHR undermined the compression mechanisms of compensation
contained in the national standard and linked to parameters (VAM and cadastral income) detached from
real commercial dynamics. This work, recalling and clarifying the aforementioned principle elements, draws the attention of the experts to
a model developed at the University of Salerno under the coordination of prof. Nicola Morano (first professor
emeritus of Appraisal in Italy) and remained unknown to most, to then apply it to a real case study in which the
evaluation of land destined to the realization of a municipal level road is required
A dynamic model for the financial sustainability of the restoration sponsorship
No full textThe paper addresses the theme of sponsorship as the main form of public-private partnership through which to finance restoration/recovery interventions for the historical- architectural heritage. The goal is the maximization of sponsorship profitability for companies. Specifically, an existing dynamic model through which it was possible to estimate the optimal annual amount to be invested in sponsorship to maximize the current value of expected profits has been analyzed, reworked and for the first time applied to an Italian company. It was therefore assumed that the company is intent on supporting a multi-year program of sponsorship investment. It is also assumed that the corporation is a single-product company, operating in monopolistic competition and characterized by a Cobb-Douglas production function with decreasing returns to scale. The work is in continuity with a previous publication focused on the application and validation of a static model. The final goal is to provide tools for applied analysis of the financial sustainability of the sponsorship that forms incentive for companies to implement its use, facilitating the recovery of the historical-architectural heritage. Public bodies can thus benefit from the greater contribution of resources from private financiers for a zero-cost and sustainable valorization of cultural heritage
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