Integrated Business and Technical System Modeling of Rail Projects with Uncertainty Analysis

Abstract

Overseas technical cooperation and technology transfer projects has many hurdles. An example is the overseas expansion and operation of high-speed railways, which are highly integrated systems. This research uses the Northeast Corridor SCMAGLEV project, a Japanese high speed railway system overseas cooperation project with the United States planned and promoted as a model, to consider what type of hurdles exist and options & decision-making for dealing with them. We decided to proceed with building a model with the aim of proposing useful measures to deal with complex projects. Aimed to be a useful management method and decision-making material for projects with such complex characteristics, we built a prototype model that integrates business and technical systems and enables uncertainty analysis. Advantage of this model is that it allows us to consider combinations of multiple system decisions and multiple business decisions. Taking advantage, for example, the research led to the following analysis: By looking at the distribution of uncertainty, it became possible to visualize the state of risk sharing due to differences in schemes (e.g., PPP and Non-PPP). In addition, by focusing on items where the expected NPV changes significantly depending on the business decision, it became possible to identify in advance contract forms where it is difficult to set numbers. In addition, we were able to visualize that the impact of long-term borrowing and interest cannot be ignored depending on the business scheme. We found that the prototype model is useful for aiming for overall optimization while considering complex combinations.