Understanding the hold-up problem in the management of megaprojects: The case of the Channel Tunnel Rail Link project

This research examines the outcome of renegotiations that happened between the UK government and private investors in the Channel Tunnel Rail Link project and develops a model to formalise the evolution of bargaining power of these two parties in the contracting period. This model makes two novel contributions in the development of theoretical understanding to hold-up problems for project management: (1) the effect of financial arrangement on bargaining power balance is quantitatively examined; and (2) the relationship between bargaining power and quasi-rent is established through the application of the Nash bargaining model.