2005 Fiscal Year Final Research Report Summary
STUDY ON BANKRUPTCY RISK AND REORGANIZATION MODEL FOR PFI PROJECTS
| Project/Area Number |
16560462
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
交通工学・国土計画
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| Research Institution | Kyoto University |
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Principal Investigator |
KOBAYASHI Kiyoshi Kyoto University, Graduate School of Engineering, Professor, 工学研究科, 教授 (50115846)
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| Co-Investigator(Kenkyū-buntansha) |
MATSUSHIMA Kakuya Kyoto University, Graduate School of Engineering, Associate Professor, 工学研究科, 助教授 (60303848)
ONISHI Masamitsu Kyoto University, Graduate School of Engineering, Research Associate, 工学研究科, 助手 (10402968)
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| Project Period (FY) |
2004 – 2005
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| Keywords | PFI / risk sharing / incomplete contract / reorganization / deposit / subsidy |
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| Research Abstract |
In FY2004, we have proposed the recovery procedure for PFI projects to secure the stable supply of necessary public services. The recovery procedure for PFI projects must include mechanisms to achieve the efficient recovery of projects. In order to establish the bankruptcy procedure for PFI projects, its inherent characteristics and constraints should also be considered. This study firstly explains the desirable goals of bankruptcy procedures and the BAHM model, which has been proposed to solve substantial problems in the bankruptcy reform of private companies. Secondly, the characteristics and constraints of PFI projects, different from those in private projects are clarified. Finally, the recovery procedures for PFI projects are proposed by applying the BAHM model and the particularities of PFI projects.
In FY2005, the three-period incomplete contract model with the liquidity constraint is formulated to investigate why the risk neutral firms are motivated to hold the insurance against the seismic risk. If an earthquake risk occurs within the period that it does not have prepared the sufficient liquidity for the recovery form seismic loss, the firm is forced to procure the necessary money from the capital market. However, if the firm are endowed with the large amount of debt, it is faced with the difficulty to procure the additional money ; i.e., the debt overhang issues. The earthquake insurance is expected to function as the vehicle to overcome the debt overhang issues. The study also investigates the moral hazard issues caused by holding the earthquake insurance, and presents the Finite insurance schemes to overcome the moral hazard issues and debt overhang issues.
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