EBEEC 2018 The Economies of the Balkan and the Eastern European Countries in the changing World Volume 2018 Conference Paper An Analysis of Critical Variables Affecting Working Capital in Infrastructure Projects Dimitrios D. Kantianis and Konstantinos J. Liapis Panteion University of Social & Political Sciences, Department of Economic & Regional Development, Greece Abstract The research aims at exploring the critical variables that affect public works contractors’ working capital in the delivery of infrastructure projects. Effective financial management has long been recognized as the ‘lifeblood’ of construction contractors, especially during economic periods of recession. The main reason for insolvency in the built environment is the lack of working capital to support contractors’ site operations. Therefore, it is vital to accurately predict the project working capital requirements at the pre-tender stage and closely monitor project cash-flow during the physical production process. The proposed methodology entails the development of a cash-flow/ working capital calculation process based on spreadsheet modelling and the Gantt chart for the derivation of project disbursements S-curves, revenue step function curves, and maximum/net cash-flow profiles. The model is implemented to a recently delivered typical infrastructure project – the construction of a new peripheral highway reinforced concrete bridge – and a sensitivity analysis is conducted to reach useful conclusions concerning the significance in infrastructure working capital of the following variables examined: the retention percentage, the ‘front-end rate loading’ by the contractor, and the premium advance incentive by the owner. The lowest maximum working capital requirement results from the provision of an advance mobilization payment by the owner to the contractor at project start-up and the selection of the latest start times site work execution program. The herein presented study is expected to assist both researchers and practitioners operating within the public construction sector in decision-making towards more effective financial management of infrastructure projects. Keywords: infrastructure projects, public works contractors, cash-flow management, working capital, Gantt chart, S-curve How to cite this article: Dimitrios D. Kantianis and Konstantinos J. Liapis, (2018), “An Analysis of Critical Variables Affecting Working Capital in Infrastructure Projects” in The Economies of the Balkan and the Eastern European Countries in the changing World, KnE Social Sciences, pages 69–87. DOI 10.18502/kss.v3i10.3531 Page 69 Corresponding Author: Dimitrios D. Kantianis dkant@panteion.gr Received: 14 October 2018 Accepted: 1 November 2018 Published: 26 November 2018 Publishing services provided by Knowledge E Dimitrios D. Kantianis and Konstantinos J. Liapis. This article is distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use and redistribution provided that the original author and source are credited. Selection and Peer-review under the responsibility of the EBEEC 2018 Conference Committee.