Optimal Selection of a Portfolio of Construction Projects with Public-Private Partnerships through the Optimization of the Horizons

In many organizations, the selection of the project portfolio and activities related to the management of selected projects during their life cycle is one of the most important activities of the organization. Due to the financial and physical constraints of the projects, there are always many projects waiting to be implemented. Therefore, the selection of projects should be such that a project portfolio is selected and formed in an optimal time horizon for proper management. Regarding the position and nature of public-private partnership agreements in Iran, ten projects with public-private partnership agreements have been selected by given the objective function to maximize the net present value of the projects by simultaneously considering two factors of reinvestment strategy and time value of capital. Input data were entered into Excel software using formulas related to public-private partnership contract to specify economic parameters, complete the data and also prepare them. Then, the model is coded in Lingo software and executed to find the research results. This model has an objective function that shows the maximum net present value of projects selected as a case study of portfolio management based on specific start times. The results of this study are obtained in two cases, according to the amount of the objective function in the case with considering the reinvestment strategy and the time value of capital with the optimal time horizon obtained in this research for eleven years, compared to the value of the objective function with the same conditions, for the assumed 20-year time horizon, 257.59 billion rials have been saved in construction costs and also one year has been reduced from the completion of the construction of the project portfolio.