LECTURE 5 GLOBAL CONSTRUCTION FINANCIAL TECHNIQUES International Construction Practices

Lecture Objectives The purpose of today’s lecture is to discuss financial issues as it pertains to construction in a global environment: 1. Lecture introduction (Jaselskis) 2. PPP in China (Dr. Sally Qi) 3. Global Construction Financial Techniques (IIT- Madras, Drs. Thillairajan and Kalidindi) 4. Discussion Questions (lead by IIT-Madras students) 5. Next week look a head (Monday)

Global Financial Issues Dr. Sally Qi, Associate Professor in the School of Management Engineering, Shandong Jianzhu University Visiting Scholar at NC STATE  Visiting scholar at Tsinghua University and North Dakota State University Current research areas include: Public Private Partnerships for Projects Project Risk Management Project Governance Improving Project Productivity Project Management Organizations

Global Financial Issues Dr. Thillairajan, Professor in our Dept. of Management Studies at IIT-Madras  Prior to joining academia, Dr. Thillai worked for over 8 years in leading corporations such as IL&FS Investment Managers and Infosys Technologies  Current research areas include: Venture capital and Private Equity Project and Infrastructure Finance Public Private Participation Corporate finance  Obtained several fellowships and awards: Fulbright Nehru Fellowship Endeavour Executive Fellowship Chevening Gurukul Fellowship

Discussion Questions Lead by IIT-Madras How do construction companies account for global risks in financing projects? Explain the risks associated with undertaking BOT projects. What is the benefit of involving the World Bank in the co- financing of construction projects? Explain why it is important for E&C personnel to know how a project is being financed when they are working on it. Explain why letters of credit are a no-risk way for suppliers to be paid by constructors. Which of the financing techniques in in Chapter 6 (GE&C) helps to protect constructors against currency exchange- rate fluctuations, and how does it do so?

Next Week—Global Productivity Issues Read Chapters 5 & 6 in GE&C Watch pre-recorded lectures as shown in the syllabus Discussion Questions  NC STATE leads Discussion Questions

Discussion Questions for Next Week (Lead by NC STATE) Of the five primary sources of labor productivity differences, which is the most important and why? What are the items that cause variations in global productivity rates? How can management help to increase global productivity rates? What are the different factors that influence productivity rates in the United States versus India? How can religious beliefs impact labor productivity (e.g., Hindu, Christian, Buddhist, Islamic, etc.)? If construction workers are forced to share tools, how could productivity be increased at job sites if no additional tools are available?

8 Questions and Discussion