Housing supply in Australia : the impact of the availability of development finance

Before the Global Financial Crisis many providers of finance had growth mandates and actively pursued development finance deals as a way of gaining higher returns on funds with regular capital turnover and re-investment possible. This was able to be achieved through high gearing and low presales in a strong market. As asset prices fell, loan covenants breached and memories of the 1990’s returned, banks rapidly adjusted their risk appetite via retraction of gearing and expansion of presale requirements. Early signs of loosening in bank credit policy are emerging, however parties seeking development finance are faced with a severely reduced number of institutions from which to source funding. The few institutions that are lending are filtering out only the best credit risks by way of constrictive credit conditions including: low loan to value ratios, the corresponding requirement to contribute high levels of equity, lack of support in non-prime locations and the requirement for only borrowers with well established track records. In this risk averse and capital constrained environment, the ability of developers to proceed with real estate developments is still being constrained by their inability to obtain project finance. This paper will examine the pre and post GFC development finance environment. It will identify the key lending criteria relevant to real estate development finance and will detail the related changes to credit policies over this period. The associated impact to real estate development projects will be presented, highlighting the significant constraint to supply that the inability to obtain finance poses.

Bayesian methodology incorporating expert judgment for ranking countermeasure effectiveness under uncertainty: Example applied to at grade railroad crossings in Korea

This paper describes the formalization and application of a methodology to evaluate the safety benefit of countermeasures in the face of uncertainty. To illustrate the methodology, 18 countermeasures for improving safety of at grade railroad crossings (AGRXs) in the Republic of Korea are considered. Akin to “stated preference” methods in travel survey research, the methodology applies random selection and laws of large numbers to derive accident modification factor (AMF) densities from expert opinions. In a full Bayesian analysis framework, the collective opinions in the form of AMF densities (data likelihood) are combined with prior knowledge (AMF density priors) for the 18 countermeasures to obtain ‘best’ estimates of AMFs (AMF posterior credible intervals). The countermeasures are then compared and recommended based on the largest safety returns with minimum risk (uncertainty). To the author's knowledge the complete methodology is new and has not previously been applied or reported in the literature. The results demonstrate that the methodology is able to discern anticipated safety benefit differences across candidate countermeasures. For the 18 at grade railroad crossings considered in this analysis, it was found that the top three performing countermeasures for reducing crashes are in-vehicle warning systems, obstacle detection systems, and constant warning time systems.

Corporate governance, accounting and finance: a review

We review accounting and finance research on corporate governance (CG). In the course of our review, we focus on a particularly vexing issue, namely endogeneity in the relationships between CG and other matters of concern to accounting and finance scholars, and suggest ways to deal with it. Given the advent of large commercial CG databases, we also stress the importance of how CG is measured and in particular, the construction of CG indices, which should be sensitive to local institutional arrangements, and the need to capture both internal and external aspects of governance. The ‘stickiness’ of CG characteristics provides an additional challenge to CG scholars. Better theory is required, for example, to explain whether various CG practices substitute for each other or are complements. While a multidisciplinary approach to developing better theory is never without its difficulties, it could enrich the current body of knowledge in CG. Despite the vastness of the existing CG literature, these issues do suggest a number of avenues for future research.

Greener and leaner : unleashing capacity of railroad concrete ties via limit states concept

New knowledge has raised a concern about the cost-ineffective design methods and the true performance of railroad prestressed concrete ties. Because of previous knowledge deficiencies, railway civil and track engineers have been aware of the conservative design methods for structural components in any railway track that rely on allowable stresses and material strength reductions. In particular, railway sleeper (or railroad tie) is an important component of railway tracks and is commonly made of prestressed concrete. The existing code for designing such components makes use of the permissible stress design concept, whereas the fiber stresses over cross sections at initial and final stages are limited by some empirical values. It is believed that the concrete ties complying with the permissible stress concept possess unduly untapped fracture toughness, based on a number of proven experiments and field data. Collaborative research run by the Australian Cooperative Research Centre for Railway Engineering and Technologies (Rail CRC) was initiated to ascertain the reserved capacity of Australian railway prestressed concrete ties that were designed using the existing design code. The findings have led to the development of a new limit-states design concept. This paper highlights the conventional and the new limit-states design philosophies and their implication to both the railway community and the public. © 2011 American Society of Civil Engineers.

Service condition of railroad corridors around the insulated rail joints

Railroad corridors contain large number of Insulated Rail Joints (IRJs) that act as safety critical elements in the circuitries of the signaling and broken rail identification systems. IRJs are regarded as sources of excitation for the passage of loaded wheels leading to high impact forces; these forces in turn cause dips, cross levels and twists to the railroad geometry in close proximity to the sections containing the IRJs in addition to the local damages to the railhead of the IRJs. Therefore, a systematic monitoring of the IRJs in railroad is prudent to mitigate potential risk of their sudden failure (e.g., broken tie plates) under the traffic. This paper presents a simple method of periodic recording of images using time-lapse photography and total station surveying measurements to understand the ongoing deterioration of the IRJs and their surroundings. Over a 500 day period, data were collected to examine the trends in narrowing of the joint gap due to plastic deformation the railhead edges and the dips, cross levels and twists caused to the railroad geometry due to the settlement of ties (sleepers) around the IRJs. The results reflect that the average progressive settlement beneath the IRJs is larger than that under the continuously welded rail, which leads to excessive deviation of railroad profile, cross levels and twists.

Opportunities for forest finance under the International climate change regime

The international climate change regime has the potential to increase revenue available for forest restoration projects in Commonwealth nations. There are three mechanisms which could be used to fund forest projects aimed at forest conservation, forest restoration and sustainable forest management. The first forest funding opportunity arises under the clean development mechanism, a flexibility mechanism of the Kyoto Protocol. The clean development mechanism allows Annex I parties (industrialised nations) to invest in emission reduction activities in non-Annex 1 (developing countries) and the establishment of forest sinks is an eligible clean development mechanism activity. Secondly, parties to the Kyoto Protocol are able to include sustainable forest management activities in their national carbon accounting. The international rules concerning this are called the Land-Use, Land-Use Change and Forestry Guidelines. Thirdly, it is anticipated that at the upcoming Copenhagen negotiations that a Reduced Emissions from Deforestation and Degradation (REDD) instrument will be created. This will provide a direct funding mechanism for those developing countries with tropical forests. Payments made under a REDD arrangement will be based upon the developing country with tropical forest cover agreeing to protect and conserve a designated forest estate. These three funding options available under the international climate change regime demonstrate that there is potential for forest finance within the regime. These opportunities are however hindered by a number of technical and policy barriers which prevent the ability of the regime to significantly increase funding for forest projects. There are two types of carbon markets, compliance carbon markets (Kyoto based) and voluntary carbon markets. Voluntary carbon markets are more flexible then compliance markets and as such offer potential to increase revenue available for sustainable forest projects.