Research Journal of The University of Zagreb, Faculty of Civil Engineering
Organization, Technology & Management in Construction: An International Journal
ISSN 1847-5450 print / ISSN 1847-6228 online
udc 62:658(05)
Abstracting/Indexing: The papers published in Organization, Technology & Management in Construction: An international Journal are abstracted/indexed by: EBSCO, INSPEC, ProQuest Science Journals
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<<Table of Content |
2. J. Korytárová, J. Štaffa, P. Papežíková, M. Špiroch:
Financial Risk Hedging Instruments for
Public Work Contracts
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Abstract:
Public work contracts create a substantial share of building
industry performance and consume a large amount of
public financial resources. Construction process should be
efficient without additional costs and overrun time schedules.
A very important point in this process is represented by hedging
public contracts against potential risk. There are many instruments
used in the Czech Republic - insurance construction
contracts, contractual penalty and retention or a bank guarantee
to name several of them. But not all of them are as effective
as the contractors need them to be. The main aim of this paper
is to find an effective set of hedging instruments in contracts for
work to sufficiently fulfil their function and protect the goals of
both the investor and the contractor impending business risks.
Information on hedging instruments has been studied on the
sample of 246 public works contracts of sewage facilities and
equipment. The empirical part of the research focuses on the
extent of hedging instruments used, and discusses their application
in the context of efficiency. Research finds out that the
most commonly used instruments are retention and bank guarantees.
Furthermore, the reasons for significant changes in
shares of these instruments in the course of monitoring have
been analyzed. The final outputs can have societal benefits and
serve the contracting authorities and suppliers as a comparison
of conditions of their own work contracts or as a help in
creation of new work contracts. As additional outputs of this
research is also comparison of contract prices and estimated
values of tender according to number of tenders and type of
award procedures.
Keywords: Public works contracts;
Hedging instruments;
Estimated value; Tender
price; Contract price
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