Employing the net present value-consistent IRR methods for PFI contracts

Yat Hung Chiang, Eddie W.L. Cheng, Tsun Ip Lam

Research output: Journal article publicationJournal articleAcademic researchpeer-review

15 Citations (Scopus)


The internal rate of return (IRR) is a common financial indicator for private finance initiative (PFI) projects. Due to the long and complicated cash flow nature of PFI projects, more plausible IRR techniques are necessary for appropriate project evaluation and ranking. However, not all the published articles researching on IRR techniques are reliable. Given the importance of computing the profitability of PFI projects, this paper is intended to introduce three reliable IRR methods, which are proven to be consistent with net present value. Examples are used to illustrate their utility. The paper is of high value as it guides industry's practitioners to use proper IRR methods for selecting PFI projects. It also provides academic researchers a platform to explore more robust methods.
Original languageEnglish
Pages (from-to)811-814
Number of pages4
JournalJournal of Construction Engineering and Management
Issue number7
Publication statusPublished - 1 Jul 2010


  • Decision making
  • Financing
  • Investments
  • Revenues

ASJC Scopus subject areas

  • Civil and Structural Engineering
  • Building and Construction
  • Industrial relations
  • Strategy and Management


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