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Innovative Financing Scheme for Repair and Rehabilitation of Critical Infrastructures Systems

Moghimi, Nima | 2023

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 56698 (09)
  4. University: Sharif University of Technology
  5. Department: Civil Engineering
  6. Advisor(s): Haj Kazem Kashani, Hamed
  7. Abstract:
  8. The aim of this research is to examine and propose solutions for financing projects aimed at reducing vulnerability in the oil industry's infrastructure against earthquakes and enhancing their seismic resilience. Design and construction issues, as well as the gradual deterioration of oil infrastructure, increase their vulnerability to earthquakes. Earthquakes can disrupt the proper and continuous functioning of these infrastructures by causing damage. Such disruptions or interruptions in the performance of oil industry infrastructure can have significant economic and social consequences. To mitigate these damages, investment in vulnerability reduction measures is essential. Financing projects to enhance the resilience of these infrastructures is one of the most critical factors in advancing them. Depending on the type of project, the costs and revenues generated from its implementation, the form and method of financing can vary. Financing projects to enhance resilience, due to the sometimes lack of a clear return on investment, present additional challenges. For example, improving the resilience of an infrastructure component like the oil supply chain against earthquakes can increase its resistance to earthquake-induced damage and reduce the time required for post-earthquake recovery. As a result of this increased resistance and reduced recovery time, both the direct costs of damage to various parts of the chain and the indirect costs resulting from disruptions in its performance will significantly decrease. However, it is clear that such actions will not always lead to direct income generation. Achieving suitable financial models for upgrading and fortifying oil industry infrastructure involves examining both direct and indirect income and expense flows and finding innovative ways to increase income and reduce costs. This research provides a novel model for financing projects aimed at enhancing the resilience of oil infrastructure based on tax revenue collection. This model focuses on taxing industries benefiting from the sustainability products and services resulting from infrastructure resilience enhancement. To assess the benefits of downstream industries from the resilience enhancement of upstream infrastructure, this study offers a probabilistic framework that assesses the impact of future earthquakes on a network of infrastructure before and after resilience enhancement using various probabilistic models. This framework, utilizing Monte Carlo simulation, determines the increase in revenue for downstream industries under different resilience enhancement scenarios and, using optimization tools, identifies the optimal resilience enhancement scenario for the oil network to maximize the total revenue. By determining the increase in revenue for each of the beneficiary industries under the optimal resilience enhancement scenario, the amount of taxes collected from each of these industries is determined. To evaluate the proposed financing model, a simplified model of a part of Iran's oil supply chain is assessed. The results indicate that taxing the increase in revenue for downstream industries due to network resilience enhancement can serve as a suitable source of funding for projects aimed at enhancing the resilience of this infrastructure
  9. Keywords:
  10. Financing ; Resilience Enhancement ; Interdependent Infrastructure Systems ; Simulation Optimization ; Cost-Benefit Ratio Calculation ; Infrastructure Resilience ; Analytical Probabilistic Method ; Tax ; Structure Rehabilitation

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