Financial Modelling of Transition to Escrow Schemes in Urban Residential Construction: A Case Study of Tashkent City

Abstract

In the paper, using the three-statement financial modelling methodology as applied to a representative development project, we aim to analyse, ex ante, the industry-level impact of transition to mandatory escrow schemes in residential and mixed-use construction in Tashkent city (due to be implemented in Uzbekistan from 2026). Modelling single-milestone escrow plans against the current steep-discount advance-based system of off-plans as a baseline, the model accounts for salient institutional features of the Tashkent city development market, including land auctioning, full-cycle Value-added tax (VAT) accounting, and Tax loss carryforward provisions. It also incorporates a framework for demand-driven residual valuations for the development land element. Our findings indicate practically unchanged cashflow profitability of developers on the market in question. Around 30% p.a. in nominal Free-cashflow-to-equity based IRRs expressed in the national currency, provided that the transition to the greater use of leverage in funding unfolds as expected. The disappearance of steep off-plan discounts while the transition to escrows unfolds will be countervailed by the reliance on costly loans from escrow banks. Absent the greater use of leverage, the IRR (FCFE) profitability of the developers is expected to decline by some 5%. For the apartment buyers, this is effectively equivalent to increasing property transaction prices on the primary market in line with their headline asking amounts. Thus-generated economic surplus will be partially captured by the developers and partially passed through to escrow banks, increasing their gross profits by up to $50M, p.a. due to their new role in financing Tashkent city residential developments that are still largely equity-driven. Apart from this effect, we find only a moderate financial leverage influence on developers’ profitability due to the high-interest-rate environment prevailing in Uzbekistan. We also find a demand-driven pressure on land auction prices suggested by increasingly back-loaded alterations in project cashflow profiles. This study also purports to make a material contribution to the evolving body of literature on financial modelling of apartment and mixed-use property developments by offering a flexible three-statement modelling framework with innovative endogenised equity management features.

1. Introduction

Many countries have experienced a transition to mandatory escrow schemes for residential and mixed-use construction plans. These countries are primarily clustered in the Middle East and BRICS regions, as listed in

Table 1. Illustrative list of countries with mandatory escrow schemes.

Country	Starting Transition Date	Source
United Arab Emirates	2008	[1]
Saudi Arabia	2017	[2,3]
Oman	2018	[4]
China	Since the 2010s (implementation of schemes at a local level)	[5]
India	2017	[6]
Russia	2020	[7]
Malaysia	1991	[8]
Vietnam	2024	[9]
Poland	2024	[10]

Source: authors’ survey.

, although the earliest initiators of the escrow schemes are to be found among the league of the British Commonwealth states, such as Malaysia. Generally, however, among the British Commonwealth countries, except for India and Malyasia, escrow schemes in property construction are conventional, but not mandatory in nature. They are, for example, popular for condominium construction in Australia and South Africa. Additionally, in Canada, some provinces and regional housing corporations have a practice of instituting mandatory escrow rules, although escrow accounts tend to be managed in the framework of attorney trusts.

The US also has a series of detailed state-level regulations mandating the use of escrow practices in condominium construction: for example, respective laws are enacted in the states of California (https://law.justia.com/codes/california/code-bpc/division-4/part-2/chapter-2/article-2/section-11243, accessed on 5 April 2025), Florida (https://codes.findlaw.com/fl/title-xl-real-and-personal-property/fl-st-sect-718-202/?utm_source=chatgpt.com, accessed on 5 April 2025) and New York (https://ag.ny.gov/resources/organizations/real-estate-regulation/escrow-regulations?utm_source=chatgpt.com, accessed on 5 April 2025). In Europe, Poland has followed suit with these progressive practices, requiring the use of escrows in residential construction since 2024 [10].

Therefore, every time a mandatory nationwide escrow scheme is contemplated for the primary residential market two key questions arise in connection: (a) the macro-economic aspect: the national-level economic analysis of consequences for the parties involved in the primary residential market (apartment buyers, developers, funding banks and mortgage agents, tax authorities), and (b) the micro-economic aspect: how developers, who are the drivers of construction, shall incorporate escrow schemes into their financial models and study the impact of such schemes on their business.

The paper aims to answer both questions for the recently announced (March 2025) escrow transition in the Central Asian country of Uzbekistan, using microeconomic foundations and relying on representative-agent financial modelling in the framework of three accounting statements. In the absence of hard macro-economic data from the Construction Ministry, we believe this is a justified and original approach, which will also close an identified research gap concerning developer-centric analysis of financial modelling for escrow schemes.

Transition to Escrow Arrangements in Uzbekistan

In the realm of real estate development and primary property markets, escrow arrangements are meant to be used as bank-mediated financial instruments designed to protect the interests of all parties engaged in a construction project. These arrangements typically involve the placement of funds from prospective unit purchasers into a neutral third-party account, usually administered by a banking institution, which is required to ensure that disbursements of funds to the initiating developer occur only upon the achievement of specific construction milestones or upon full project completion. This mechanism functions as a safeguard to promote reciprocal adherence to contractual obligations by developers and buyers alike before the release of funds.

Under Presidential Decree YP-11, issued on 27 January 2025, the Republic of Uzbekistan has mandated the implementation of escrow-based financial arrangements for all registered off-plan residential property transactions related to the primary market—commonly referred to domestically as “investment” or “DDY” contracts—effective from 1 January 2026. Under the new regulatory framework, prospective apartment purchasers will be required to deposit advance payments into designated escrow accounts held with authorized banking institutions. These arrangements will be governed by tripartite agreements involving the buyer, the property developer, and the escrow bank responsible for financing the project. Like in the Russian Federation, whose now 5 year-long escrow experience was closely studied in drafting the Uzbekistan Escrow presidential decree, disbursement of funds from the escrow account to the developer will occur only upon verified completion of construction and registration of the property in the national property Cadastre, although a milder, gradualist mile-stone based approach can also be contemplated in the implementing by-laws to follow later. In effect, the bank intermediation related to escrows aligns financial flows with actual project delivery/completion and enhances contractual compliance safeguards (See Figure 1).

For developers, the transition to mandatory escrow schemes fundamentally alters traditional financing models and imposes a heavy compliance regimen of project finance that can be likened to a “finance diet”. Under the new framework, funds received from future apartment purchasers can no longer be freely deployed at the developer’s discretion to support ongoing construction activities. Instead, these buyer deposits will remain frozen in escrow accounts managed by designated banks, with access restricted to them until specific contractual or regulatory milestones are met.

To maintain project liquidity under this system, developers are compelled to secure interim financing—typically in the form of loans issued by the same escrow banks—thereby incurring interest obligations until such time as escrowed funds are released. In Uzbekistan’s anticipated single-milestone escrow model, this release occurs only upon full completion of construction and the formal registration of the property, with the entire amount disbursed as a lump sum. This represents a significant departure from prior practices under the DDY (investment contract) scheme, in which developers had immediate access to advance payments from purchasers and could directly allocate these funds toward construction expenditures without intermediary restrictions.

Such a deferral of fund disbursement has substantive liquidity implications for developers. In the context of Tashkent, Uzbekistan’s capital, with an estimated population exceeding four million, the average residential construction project spans approximately two years, with additional time required for legal formalities such as title registration [11]. This temporal lag between the initiation of buyer payments and the eventual release of funds to developers introduces a structural mismatch into increasingly back-loaded cash flow timings. Such delays in cash flow receipts and revenue recognition can be analytically assessed using established financial modeling techniques [12,13], which we also aim to undertake in the Paper.

Analyzing escrow transition,

Table 2. Comparative analysis for off-plan developments in Uzbekistan: old DDY Scheme vs. new Escrow Scheme in Uzbekistan’s Residential Real Estate Market.

Item	Extant DDY Scheme (Pre-2026)	New Escrow Scheme (Effective 2026)
Legal Basis	Based on off-plan investment contracts under the “DDY” (Ulushdorlik asosida shartnoma) legal arrangement.	Mandated by Presidential Decree YP-11 (27 January 2025), effective 1 January 2026
Buyer Protection	100% buyer’s risk on off-plans: Limited safeguards in case of developer default or project delay. However, unlike characteristic delays by a year or two, the actual cases of full default and project abandonment are rare in Tashkent.	Buyer’s risk largely eliminated: Enhanced protection—apartment buyer’s advances held in escrow bank custody are secure and can’t be re-allocated by banks towards any risky investments.
Fund Flow Mechanism	Front-loaded: Buyers’ advance payments were made directly to the developer’s account and treated as prepayments/advances in the accounting system of the developer.	Back-loaded: buyers will deposit funds (only in sum, the national currency) into an escrow account managed by a licensed bank. The funds will be frozen in the account for the duration of the construction process, yielding interest to the developer that is not expected to exceed the central bank refinancing rate.
Developer Financing Model	Advance-based: Buyer advances served as primary construction financing. Needing the funds, developers were eager to offer steep discounts to early-bird off-plan buyers (up to 30% off the market price at the earliest development stage). These discounts are by no means unprecedented for the developing property markets. Kimaru (2018) reports even higher off-plan discounts for Nairobi in Kenya.	Leverage/Debt-based: developers will have to secure working capital loans from the escrow bank to finance construction and tide them over financially until the unfreezing of escrow funds. Since apartment buyers are out of the picture in the fundraising matter, off-plan discounts will disappear as a feature.
External project supervision	Government-supervised: Under the old DDY mechanism, projects had to be registered, but the actual government supervision of projects was minimal.	Government and bank supervised: Escrow bank employees will exercise due diligence on the flow of developers’ funds. Sub-standard construction materials won’t be deliverable for cash anymore.

Source: [11], Presidential Decree YP-11.

compares the salient features of the old (DDY) and new (escrow) regime for off-plan developments in Tashkent and wider Uzbekistan.

This qualitative comparison confirms that the benefits and disadvantages of the escrow transition are mixed: on the one hand, apartment buyers get a bank-grade financial protection of their invested amounts in a not very fraudulent-prone investment environment. On the other hand, they will miss out on the chance to avail of steep off-plan discounts as early-bird property investors. Real arbitrage opportunities whereby financially savvy apartment buyers were investing at the early construction stage only to resell their apartments once complete at a sure-fire profit margin will become things of the past.

For developers subjected to continuous supervision by the escrow bank, the escrow transition will signify the race for construction quality, which is important in earthquake-prone zones like Tashkent. On the assumption that this race for quality won’t result in price escalation amidst the largely stagnant or declining property prices in Tashkent [14], the impacts of escrow transition on developers’ accounting and cashflow profitability, liquidity, and equity needs will be additionally quantified in this paper. As a research hypothesis, we can posit that the use of leveraged funds (i.e., the advanced escrow bank credit) will serve to engender financial leverage effects for developers, even in the context of a high-interest rate environment such as in Uzbekistan. (currently, the following rates prevail in Uzbekistan: an average deposit rate offered on deposits of individuals of 22.1% p.a., a central bank refinancing rate of −14%, and the 2024 CPI inflation rate is 9.8% (see https://cbu.uz/ru/statistics/rates/, accessed on 10 April 2025)). Additionally, our methodology will enable us to capture the demand-side effect on land prices for Tashkent city land sold at auctions, in consequence of the transition to escrow plans and on the assumption of the constancy of the land share in project cash flows.

For banks, we can hypothesize positive interest-rate-related benefits from reaching into the new escrow credit niche, against the backdrop of largely marginal monitoring costs.

For the government, the positive effects associated with escrow transition are hypothesized to arise from the taxation of incremental bank profits and auctioning off the development land at potentially higher prices.

At the end of the day, we hypothesize that apartment buyers will have to bear the ultimate costs of protection from investment risk by foregoing sizable off-plan discount opportunities at early investment, which is essentially equivalent to escalating the general price level for property transactions on the primary residential market.

Having outlined the transitional changes to escrow and the impact hypotheses, the paper is further organized as follows: Section 2 provides the literature review, aiming to find the closest public-domain precedents for the attempted research and delving into the availability and organization of comparable financial models for the subject area. Section 3 on methodology describes the organization (structural blocks) of the proposed financial model that we use to study the impact of escrow transition. Section 4 reports findings from the application of this model to study the ex-ante impact of escrow transition for the Tashkent residential and mixed-use development segment. Section 5 and Section 6 conclude with the consideration of macroeconomic implications and policy advice.

2. Literature Review

Although the general impact of escrow schemes on construction is widely acknowledged in the literature related to the CIS region, there is remarkably little by way of the public domain literature concerning financial modelling for developers’ escrow plans.

2.1. International Analysis of Ex-Post Escrow Transition Effects and Survey Opinion

As to general impact of escrow schemes on the development process, Abduljabbar [15] for Saudi Arabia and Matveeva [7] for CIS region, discussing the implementation of escrow schemes in their respective jurisdictions, notice their impact on increased investor confidence by insuring transparency and reducing the risk of misappropriation of funds—a consideration less pressing for Uzbekistan, where off-plans are characterized more by pervasive delays, rather than outright risk of embezzlement (Over the past 4 years, three developer-related embezzlement cases have been reported for the Tashkent region, principally the case of “Aziya Invest Favorit” which defrauded about 1000 off-plan buyers. A designated government commission was set up in 2023 to inquire into these cases. https://www.gazeta.uz/ru/2023/07/07/gov-comission/, accessed on 4 May 2025). Contrary to this common stance, McDaid [3] and Suhaib [16] surveys for Dubai city find that the implementation of escrow legislation in that emirate has not significantly increased investor confidence, and has even constituted a project delay factor against the backdrop of weak bankruptcy enforcement practices. Likewise, as argued from a legal perspective by Pylypenko & Synchuk [17] and Tarhonii [18], the actual efficiency of escrow plans hinges much on the extent of fiduciary duties of escrow agents, which vary much from country to country.

On the downside, it is reported that nationwide deployment of escrow plans is not infrequently characterized by escalating primary-market prices as escrow-related interest costs are passed on to the residential unit buyers [19,20] or result in reduced construction volumes [7]. For quantification of this effect in a high-interest-rate environment such as Uzbekistan’s, for example, a survey undertaken by Kimaru [19] in Kenya notes that advance-funded off-plans reduce construction costs for developers by up to 8.5% compared to cases when developers resort to loans, as happens in escrow schemes. For Saudi Arabia, Abduljabbar [15] disagrees with this stance, noticing the consensus opinion in his panel that escrow plans result in a reduction in property prices over the long term.

Several studies related to the CIS region [21,22] also notice the industry-wide impact of centralized escrow transitions, indicating that escrows result in the consolidation of the playing field for developers and equity deficit-induced challenges for small developers in accessing financing. Analysing the impact of India’s transition to compulsory escrow plans under the RERA Act, Bhagwat & Thakur [12] additionally notice the prominent shift in long-term and working capital funding structures, quantifying the related effect. Their study finds that, post-RERA, developers’ balance sheet measures like the current ratio, as well as the operating cash flow, changed, indicating much tighter liquidity. Developers had to rely more on debt or equity as the easy money from pre-sales was locked up.

2.2. International Analysis of Ex-Ante Escrow Transitional Aspects: The Role of Financial Modelling

In the ex-ante mode relevant for Uzbekistan now, when escrow transition is only planned or is in its early stage, ultimately, the matter of developers’ impact arising from escrows can be estimated by recourse to financial modelling. Hence, the relevant financing modelling practice needs to be reviewed. It is here that we identify the paucity of sources and the research gap that our Paper aims to fill specifically.

While continuous-time models exist for the financial modelling of escrow accounts and the related optimization of construction cashflows [23], these models are characterized by the low-granularity of inputs, therefore, the state-of-art in construction- related financial modelling is still represented by discrete-time models from sources, such as [24], discussing Argus protocol frequently used for developments in the British Commonwealth Counties, which, however, falls short of the three-statement modelling for escrows. Basics of financial modelling for construction-related project finance are also covered in sources such as [13], which, however, eschew a focus on specific financial models for escrow plans.

Chayetskiy et al. [21] come closest in terms of modelling the subject matter of residential developments based on escrow plans. Moreover, the authors set the precedent for using their financial model exactly for the purposes meant in our paper: analyzing a representative project to model structural shifts in financing following escrow adoption by developers and thereby studying the impact of the escrow mechanism on the corporate finances of developers. Specifically, using the representative project, they focus on analysing the optimal minimum threshold for developers’ equity funding requirements to qualify for escrow plans. However, Chayetskiy et al. model [21], while useful, is not of the level of detail commonly expected of developers’ own financial models, and they do not deploy the three-statement format for financial modelling of residential developments, such as [25], which commonly represents the industry standard across the CIS states, and even in Uzbekistan.

In keeping with the three-statement financial modelling convention, we further propose an integrated financial model whose level of detail and complexity is tailored to address both the operational needs of developers soon to operate under the escrow regime in Uzbekistan and to answer the wider questions about the industry-level impacts of escrow transition in Tashkent.

3. Methodology

Answering questions about the microeconomic and macroeconomic impacts of the escrow transition for the city of Tashkent developments relies on our analytical framework for developing a scalable financial model for escrow-based developments. The approach has certain strengths, specifically, in minutely capturing the changes in the economics of construction observed at a unit development level, but it is also characterized by certain weaknesses of aggregation as far as the subsidiary and knock-on effects are concerned when scaled to the city or country-wide level.

Once the financial model is developed for two mutually exclusive policy options (“variants”)—the current DDY off-plan scheme based on advances receivable by developers and the new single-milestone based escrow scheme—it will be possible to compare the performance of both variants of the model as applied to a representative development in Tashkent and deduce economic implications of the transition to escrow (i.e., the comparative analytical approach). Scaling up the representative project to the city level will then permit wider generalizations with macroeconomic import. It may be said that in this we strive to follow the famous representative-agent methodology advocated by the founders of economics, such as A. Marshall, who famously came up with the relevant average-tree-in-the-forest metaphor for that [26].

To this end, a nominal three-statement financial modelling methodology has been selected by us to develop a financial model for a representative mixed-use comfort-class development in Central Tashkent costing $90M (net of VAT) in terms of investment costs (with a total built area of 60,000 sq.m., 60% of which is represented by a residential space). While developments on this scale are very characteristic of modern Tashkent, which increasingly eschews small-scale developments [11], the fact that the subject development has a 40% commercial space component sold outright through sale-purchase contracts, unaffected by escrows, will moderate the findings, making them more conservative and also applicable to mixed-use developments generally.

As reviewed in the literature, while using representative-development financial models to answer industry-wide questions is not original in application, we maintain the originality of our methodological contribution in offering the three-statement financial model with a direct-technique-based Cashflow statement to study the impact of single-milestone escrows as juxtaposed against the outgoing DDY-based schemes in Tashkent. The originality of the model in terms of open-domain sources also lies in integrating VAT-related taxation aspects and Tax-loss carryforwards, as well as splitting the resulting Free Cash Flows to Invested Capital (FCFFs) to analyse the investment worth of the development land element.

A research approach taken in the Paper is summarized with the help of a flowchart below (see Figure 2).

3.1. Key Data Assumptions and General Features of the Financial Model

Data sources employed in the development of the financial model are varied: the unit selling prices and vacancies used for apartments were benchmarked against the property market reports, such as [11], and unit construction costs were benchmarked against the CIS Co-Invest construction cost manual [27]. VAT rates, land taxes and costs, as well as Tax-loss carryforward (TLC) provisions, are based on the institutional requirements of the jurisdiction as per the Uzbekistan Tax Code, while the exploratory baseline values for the depository rate on escrowed funds and loan rates from escrow banks are the policy analysis assumptions. In many instances, data were available in a range form, and the use of specific point estimates in the model represents a professional judgement of the model developer. Some specific assumptions are also mentioned contextually in the text, tables and footnotes below.

In both variants, the proposed financial model has a flexible modular structure that easily adjusts to the addition of new units and/or construction stages. At a high level, its layout is organized in four spreadsheet blocks/tabs. All the line references below relate to the baseline (DDY) variant of the model, as follows:

• “DCF” tab is the central tab of the model which spreads out key development project costs across time and construction sequences, as well as aggregates key model cash flows (FCFFs (Line 135) and FCFEs (Line 129)) and outputs (the balance sheet in Lines 110–122, the P&L statement in Lines 76–90, and the direct-format cashflow statement (in Lines 93–108) for the project)
• “VAT estimates”—the model dedicates a separate tab to VAT accounting-related cashflows and offsets due to the uniformity of construction practices in Tashkent on that point, as the projects can only be formally registered by developers/construction companies that are themselves registered as VAT taxpayers. As a rough rule of thumb, we adopt a uniform assumption that 50% of construction costs, except for land and administrative costs, are subject to the VAT tax inputs.
• “Unit costs” is the tab to record unit construction cost specifications for each stand-alone construction block or property in the project. These can be sourced from the actual construction estimates or construction estimators, such as Co-Invest Residential [27], which was relied upon (unit comparable plan IDs used are indicated on line 9 of the “unit costs” tab). Making allowances for structural and market vacancies, Table 2 on this Tab (Lines 26–37) also records projected selling prices for the developed units in the blocks (the average of USD 1700 per m² of general living space is the assumed best estimate for representative construction quality class selected (gross of any discounts, net of VAT) [11]. An overview of statistically significant property pricing attributes for Tashkent city is also given in [28], including commercial and parking spaces, along with the associated sales VAT.
• “Land valuation” tab focuses on providing the valuation of the land element based on the assumption of a certain land share in the (positive) FCFF cashflows generated by the project [29]. This valuation, therefore, can be regarded as the demand-side valuation (rendered to an investment value, or worth, standard). However, employing the share of the land element as a calibrating parameter (Cell D138 of the “DCF” tab), along with the discount rate for the land element-related cashflows (Cell D139), can align the resulting estimate of land value with the actual market price or market valuation.

Table 3. Key Parameters of the Financial Model.

Parameter	Description	Additional Comments
Model type and description	Nominal three-statement, sum-denominated model (The Uzbekistan national currency is called the Uzbek sum), with the unit of measurement being 13,000 sum (equivalent to approx. $1 as at the analysis date—10 April 2025). The model is projected with data at a quarterly frequency (with a total of 12 project quarters till the end) and derives cashflows using the direct technique to cashflow derivation [29]	Key inflation assumptions: Inflation for construction costs: 15% p.a. Inflation on the primary apartment and commercial property market is 15% p.a. (the assumption of zero real growth of the price level over the next 2 years). (The nominal rate of 15% p.a. is also used as a policy assumption for the depositary rate on escrowed funds in the escrow variant of the model).
Model duration (forecast period)	The forecast period is made up of 12 quarterly intervals. Each construction phase takes 2 years (8 quarters)	Note that the representative project is undertaken in two construction phases, set apart at a 6-month interval.
Additional features of the model	The model accounts for the project management costs and payroll, initial land acquisition, Tashkent central zone land tax, VAT timing and offsets, as well as for the profit taxation and Tax-loss Carryforwards (at 50% offset rate as per the Tax Code).	It is assumed that any municipal commitments to infrastructure and service developments do not encumber the developer. Project management costs and payroll are assumed to be funded by the developer’s equity
Model outputs	Model outputs include: Free cash flows to Equity (FCFEs), Free cash flows to the project’s overall invested capital (FCFFs), FCFFs split between the building and the land component, DCF-based development land valuation, as well as the associated project efficiency metrics, including Net present value (NPV) and the cashflow-based Internal rate of return (IRR), namely NPV(FCFE), IRR (FCFE).	The model also provides proformas of the three accounting statements and related ratios. Development land valuation is based on capitalizing a certain proportion of positive-valued FCFFs and FCFEs from the project.

Source: author–developed model.

lists the key structural features of the developed financial model.

In its turn, the main “DCF” tab of the model is partitioned into about a dozen sections, plus the concluding section to undertake the sensitivity analysis, thus:

• Macroeconomic schedule (Lines 5–8 of the DCF tab), which is needed in the nominal model to record expectations of inflation for construction costs and the primary market prices
• Investment cost schedule (Lines 10–28): It is used to translate unit construction costs from the respective separate tab of the model into inflation-adjusted construction cost amounts at the overall development level and arrange their temporal placement across the forecast period span of the model. The investment cost schedule is coupled with the Investment cost write-down account, which is then used to write down investment costs to the P&L statement (Lines 67–74) proportionate to the recognition of revenue.
• Financing cost schedule (Lines 30–38) to project debt balances for balance sheet purposes and estimate interest expenses on the debt-financed portion of the investment costs (In contrast to construction costs proper, note that in both versions of the model, all the operating costs of the project (in Lines 40–46 of the DCF tab, principally, administrative and marketing expenses, plus the entirety of the land costs, i.e., land acquisition at auction and the development land taxes) are assumed to be covered by the developer’s equity.
• Operating cost schedule (Lines 40–46) comprising, principally, feasibility and design, administrative and marketing expenses, plus the development land taxes for the period of construction. Due to their operational nature, and in contrast to the investment costs, these costs are assumed to be covered by the developer’s equity only.
• Schedule of cash receipts from the project (Lines 49–60) recording the timing and amounts of cash flows related to property unit sales and calibrating the progressive extent of percentage discounts along the temporal profile of off-plan advance payments, as is customary in Tashkent. The DDY version of the model also features an auxiliary schedule on Lines 62–65 to record the movement of buyers’ advances in and out of the deferred income account that features in the balance sheet (on Line 121).

These schedules interact among themselves and with the “VAT estimates” tab of the model in the framework of the three-statement model recording principle [29] to produce the three-statement output, which is then used to develop the project’s FCFF and FCFE cashflows under the direct technique. The three statements in question are the accrual-based Profit and Loss statement (Lines 76–90), the balance sheet (Lines 110–122) that balances (as seen in Line 123), and the direct-format Cash flow statement (Lines 93–107).

Information contained in these statements ensures the derivation of all sorts of financial ratios (e.g., project’s ROE, Line 124), and project cash flows—FCFE (Line 129), and FCFF (Line 135). Capitalising these cashflows into the present value yields the project’s Net Present Value—NPV(FCFE) on Line 134, and enables IRR (FCFE) estimations, on Line 132.

Both FCFE and FCFF cashflows are derived under the direct method based on the net cashflow (NCF) in the cashflow statement (Line 107); the respective formulas (with signs as applicable to absolute values of the constituent formula terms) are as follows [29]:

FCFE_t = NCF_t + DP_t − EQT_t⁺ + EQT_t⁻

(1)

where, NCF_t is the net cash flow from the bottom line of the project’s Cashflow statement for period t; DP_t—is the dividend payout for the period t; EQT_t⁺ is the periodic contribution of additional equity by the project initiator (developer); EQT_t⁻ is the periodic withdrawal of equity from the project by the project initiator.

Given the analytical concerns of analysis, the second and fourth terms of the formula are zero-valued, due to the dividend policy irrelevance proposition in the cashflow analysis context [30].

Based on the FCFEs from Formula (1) above, it is also possible to derive FCFFs, which are relevant for the development land valuation context with signs, again, as applicable to absolute values (modulus) of the constituent formula terms [30]:

$$FCFFt=\left\{\begin{array}{r}{FCFE}_t + (1-T) * {IP}_t -D_t^{+}+D_t^{-} , if EBITt>0\\ {FCFE}_t + {IP}_t -D_t^{+}+D_t^{-} , if EBITt\le 0,\end{array}\right.$$

(2)

where, ${IP}_t$ are interest payments on the project’s loan (escrow bank borrowings) in period t; T is the effective profit tax rate of the project (statutory values); $D_t^{+}$ is the loan principal raised in period t; $D_t^{-}$ is the loan principal repaid in period t. The use of conventional tax shield adjustment (1 − T) is only justifiable for model periods with positive operating profits from the project, $EBITt$ (the profit tax is payable at quarterly intervals in Uzbekistan, so this formula is equally applicable to quarterly intervals on which the model is based).

Apportioning a certain share of positive-valued FCFF cashflows to the land element over the construction period allows to estimate (in Cell D 140, also reported “Land valuation” tab) the investment value, or worth, of the land element (the development land use rights are usually auctioned off in Tashkent so this feature of the model is useful in its own right to help work out reservation land prices for bidding). The use of FCFFs in this context is suggested, for example, by Codosero et al. [31].

One notable feature of the model is an endogenized additional equity requirement estimation procedure (line 104 of the “DCF” tab):

$$EQ{T}_t^{+}=\left\{\begin{array}{r}ICt-D_t^{+}-OCFt , if ICt-D_t^{+}>OCFt\\ 0, if ICt-D_t^{+}\le OCFt,\end{array}\right.$$

(3)

where, as previously, EQT_t⁺ are the additional equity funds to be contributed by the developer in period t, and, additionally, $ICt$ are the periodic investment (construction) costs of the project; and $OCFt$ are the periodic operating cashflows of the project (line 93 of the “DCF” tab). In Formula (3), all the variable values are used having regard to the actual sign of their estimates (i.e., not by modulus).

That is, under this procedure, the model suggests the required minimum equity amount to be raised during each period t on the basis of the difference between the net equity funding need ($ICt-D_t^{+}$) and the available operating cash flow (OCFt). Additional equity, therefore, also covers the negative amounts of the operating cashflow, which can be occasioned by the project’s operating (management and payroll) costs.

Apart from the additional equity required for the project as the construction goes on, there is also the need for initially seeded project equity in the form of working capital cash and the land contribution (which is assumed in the model to be funded by the developer’s equity). Working capital cash is introduced into the opening balance sheet of the model, such as to eliminate negative cash balances (“cash holes”) throughout its forecast period. Thus, the model assumes piecemeal contributions of equity and reports project equity requirements both at the initial moment and for the additional construction-related equity.

3.2. Distinguishing Features in the DDY (Baseline) and Escrow (New Policy) Variants of the Model

The residential baseline variant of the model is represented by the existing DDY investment scheme, which distributes residential cash collections almost evenly over the construction period with a slight bias towards later periods and allows for up to 15% off-plan discounts (Lines 50–51 and 55–56 of the DDY model). The cash collections on DDY contracts represent the developer’s advances in an accounting sense, whereas the developer recognizes the development revenue upon the apartment title registration.

Set against this situation is the new alternative escrow model variant with a single milestone (being the cadastral registration of property), whereby the developer receives as the actual cashflow, and recognizes as revenue, the residential unit funds from apartment buyers only at the end of the property construction and registration process. Due to the restrictions imposed on the use of escrowed funds by banks in the YP-11 Decree, the associated interest accrued by the escrow bank on accumulated escrow balances during the freeze period is assumed to compensate the developer just for inflation alone, earning the developer 0% real interest rate (or 15% nominal rate).

In

Table 4. Additional distinguishing specifications for DDY and Escrow variants of the model.

DDY Model (as per Extant Regulations)		Escrow Model for YP-11 Transition (with 100% Reservation of Funds and the Single Terminal Milestone at the Cadastral Registration of the Development)
Model repository: https://disk.yandex.ru/d/HXcNukK1qgYbEQ, accessed on 10 April 2025 (for both variants of the model)
Feature	Commentary	Feature	Commentary
Treatment of advances from apartment buyers	Represents actual cash flows received by the developer (Line 94 of DCF tab) as incoming advances and balance sheet liabilities (Line 121). A deferred income account schedule is used in the model for that (Lines 62–65). The amount and timing of the advances are calibrated in the “Project receipts/revenues schedule” (Lines 50–51 and 55–56), specifying the periodic breakdown of prepayments matched to the extended off-plan discount percentages.	Model treatment of funds held in escrow	As all the buyers’ advances are paid into the escrow bank to be released to the developer at the cadastral registration of the development, both the cash flow from unit sales and the associated revenue are recorded simultaneously at the terminal point (the last quarter) of the model. Unless the project is 100% equity-funded and the developer needs no recourse to escrow bank loans, any originating cash shortfall during the construction process is covered by the loan obtainable from the escrow bank (Line 31) The interest rate on escrow bank loans is assumed at 24% p.a. (Cell D 37), while the depository rate of interest on the frozen escrow balances (implied in Lines 56 and 86) is assumed to be accrued to provide compensation not in excess of the projected inflation (i.e., at 15% p.a).
Recognition of revenue and construction costs in the project’s P&L statement	Project revenue is recognized at cadastral registration of the property (in the final year): at this moment, all the advances received are transferred to the project’s revenue in the P&L statement (Line 76). In line with the received accounting treatment, the project’s investment costs are also written off against the revenue at that time (Lines 74, 77).	Recognition of revenue and construction costs in the project’s P&L statement	The treatment is similar to one in the DDY model: project revenue is recognized the moment the escrowed funds are unfrozen at the cadastral registration milestone. Investment costs are also written off against the revenue at that moment. It is to be noted, however, that due to the disappearance of off-plan discounts characteristic of the old (DDY) scheme, the profile of revenue (and CF streams) is not just back-loaded; it is also expected to be greater in total value.
Sales VAT treatment	Is a part of the developer’s cash flow to be received simultaneously with the developer’s advances (Line 97)	Sales VAT treatment	Sales VAT on escrows is received by the developer as actual cashflow simultaneously with the main proceeds at the completion of the single milestone.

Source: author–developed model.

, we collate the key assumptions for the two variants of the model explored.

Additionally, aided by the two variants of the model we aim explore the two following funding scenarios to capture the impact of debt-induced financial leverage on the representative project: (i) 100% of investment costs covered by investor’s equity (0% loans and escrowed funds), and (ii) 50% of investment costs (except for land and initial cash balances) covered by escrow bank loans. Traditionally, in Tashkent, property development has been, for the most part, funded by developers’ equity, so we believe the second scenario will stand to become the new convergence point in a move away from predominant equity funding as the escrow schemes become institutionalized. For the minimum equity threshold, it is believed that escrow banks will impose the minimum requirement of 30% equity to make property development schemes admissible for escrow plans [32].

4. Results and Findings

The following results are obtained for key model outputs assuming the disappearance of DDY-related discounts for advance off-plan payments upon transition to escrow plans:

4.1. Effect on Developers

In the levered investment context, modelling the transition to escrows, we observe the positive effect on developers’ FCFE-based cash flow returns (IRR (FCFE)) in the representative project, namely, the increase in nominal IRR from 23% to almost 30% p.a. The effect is principally due to the disappearance of off-plan discounts as the transition to escrow unfolds, and it overwhelms the countervailing increase in interest rate costs. Compared to this effect, the effect from financial leverage is minor: funding the escrow project with 50% debt instead of 100% equity bootstraps the FCFE returns further by only a meagre 2% p.a. This is because the initial cash flow returns on the project are practically comparable with the cost of bank funds: the latter are not much cheaper than the overall unlevered returns obtainable from property development in Tashkent. Therein may lark the explanation for the traditional disinterestedness on the part of Tashkent developers to fund their projects by debt: roughly it was cheaper to offer 30% discounts to the early-bird buyers of off-plans that to fund the project through a bank loan over two years at, say, 24% p.a. Generally, this situation is expected to be the hallmark of high-interest-rate counties, like Uzbekistan.

It is to be noted from the analysis presented in

Table 5. Key financial model outputs for both variants of the model.

Item	Baseline (DDY)	Alternative (Escrow)	Difference Between the Two Variants
100% Equity funding for investment (construction) costs of the project:
FCFE-based Internal rate of return (IRR), %p.a. (nominal)	32%	27%	−5% p.a.
Initial equity contributions, including land	$9.3 mln	$9.3 mln.	Unchanged
Additional equity contributions, $ mln.	$23.5 mln.	$57.7 mln.	An increase of 2.4 times
Total equity contribution, $ mln.	$32.8 * mln.	$67.0 * mln.	An increase of 2 times
50% debt funding for investment (construction) costs of the project:
FCFE-based Internal rate of return (IRR), % p.a. (nominal)	23%	29% **	+6% p.a.
Initial equity contributions, including land	$14.3 mln.	$9.2 mln	A reduction of 35%
Additional equity contributions	$6.0 mln.	$ 36.4 mln.	An increase of 6 times
Total equity contribution	$20.3 mln.	$45.6 mln.	An increase of 2.2 times

Note: * Total equity of the project can be less than the investment costs of the project since, at the closing stages of the project, some construction is funded out of proceeds from buyers’ revenues. Shaded (grey-coloured) areas of the table represent the expected transition course for the market following the introduction of escrows (from top-left to bottom-right). ** The sensitivity of 29% IRR (FCFE) estimate to particular escrow parameters is as follows: decrease in the escrowed funds rate (payable by the escrow bank to the developer on the frozen funds) by 1 absolute % (down from 15% p.a. assumed baseline) will translate to the IRR (FCFE) reduction of 1% (with more or less linear sensitivity trajectory). Additionally, and rather asymmetrically, for the 50% leveraged version of the development, if the loan rate charged by the escrow bank increases from the baseline nominal 24% up to 25% (i.e., +1 absolute % change), IRR (FCFE) of the representative project reduces by 0.3% p.a., with other things being equal. Source: model outputs.

that the usage of 50% debt leverage on construction costs under escrow plans would only offer slightly lower equity (FCFE) returns to developers (29% p.a.) compared to the present-day off-plan (DDY) situation with steep discounts and no usage of leverage (32% p.a.—both indications are the nominal sum-denominated returns). These indications are slightly but consistently higher than the cost of debt to the construction industry (24–27%). Hence, the usage of debt leverage on construction costs is expected to become the “new normal” among developers in Tashkent, with developers not being much worse off than before in terms of equity returns, and potentially better off at higher than moderate debt levels.

The transition to escrows thus means that developers will have a greater financial incentive to continue building residential properties in Tashkent. A more substantive identified problem—arising due to unavailability under escrows of prepayments from buyers as under the old DDY schemes—is the anticipated need for a much higher equity capitalization of developers, even if they avail themselves of a higher level of bank loans afforded by escrows (but still short of 100%). As seen from Table 5, the associated effect indicates a two-fold increase in the required equity level. This will proportionately reduce accounting ROE ratios for developers and has the potential to further consolidate the development activities in Tashkent, leaving the field only to big, well-capitalized players.

Thus, an unequivocal construction advice that can be given to city developers at this juncture is to push for the better capitalization and liquidity of their construction entities pending the escrow transition, including through partnerships and reorganizations, such as consortia, mergers and acquisitions. Absent this, the developer’s capacity for successful construction bidding can be reduced, impairing their equity accumulation in turn. This trend towards industry consolidation is not merely speculative and goes deeper than escrow transition: according to the Uzbekistan Statistical Committee, the number of active construction/developer companies in Uzbekistan has sustained a fall of some 40% since 2022 [33].

In terms of accrual accounting profits from the development, with 50% equity funding for construction costs, the comparison of the representative-project profit and loss statement aggregated over the 12 quarters of the project’s span is attempted in

Table 6. Profit and loss statement for the representative project ($ equivalent).

Proforma P&L Items (Totals over the Construction Period)	DDY Variant		Escrow Variant		Difference (Escrow over DDY)
	$ equivalent	Vertical ratios, % to revenue	$ equivalent	Vertical ratios, % to revenue
Revenue	138,722,086	100%	149,655,282	100%	7.88%
Investment costs (including demolition and infrastructure)	90,193,492	65%	90,193,492	60%	0.00%
Selling and administrative expenses	6,074,074	4%	6,074,074	4%	0.00%
EBITDA	57,236,568	41%	57,087,719	38%	−0.26%
Interest on loan (@ 24% p.a.)	4,584,839	3%	8,588,264	6%	87.32%
Pre-tax profit	40,424,852	29%	48,499,455	32%	19.97%
Tax loss offsets (TLCs)	8,135,709		9,404,028		15.59%
Profit tax	6,063,728	4%	7,274,918	5%	19.97%
Net earnings	34,361,125	25%	41,224,537	28%	19.97%

Source: P&L from author-developed financial model variants.

.

It is interesting to note that the P&L project development economics won’t change much in relative (vertical) terms, but the absolute amounts of revenues and profits for developers will be expected to increase due to the disappearance of off-plan discounts on the market.

4.2. Effect on the Apartment Buyers and the Mortgage Market

While offering enhanced payment security, the implementation of escrow arrangements is likely to disadvantage apartment buyers in other respects. Previously, early investors in off-plan residential developments in Tashkent could access substantial price reductions, sometimes as high as 30%. The new escrow framework is expected to diminish such incentives, as it reduces the investment risk associated with primary residential property purchases. Furthermore, the elimination of staggered DDY advance payments can be expected to increase reliance on mortgage financing, thereby exposing buyers to additional borrowing costs in the form of interest payments.

4.3. Effect on the Banking Sector

Beyond the mortgage sector, commercial banks managing escrow accounts are poised to benefit significantly. These institutions are expected to earn interest income on the funds collected from buyers and held in their escrow accounts during project development. In the case of Tashkent, which commissions about one million square meters of residential space annually [11], a scenario assuming a zero real interest rate on escrow deposits and 50% loan funding of construction costs by escrow banks could yield gross interest margins of up to $50M for the banking sector. The amount is estimated as an interest rate margin on escrow loans extended to developers net of depositary rate of interest due on escrowed funds, with the estimates carried out on a unit (i.e., per square meter) basis and having regard to both endogenous and exogenous models of banking business (The arithmetic average estimate for both models is reported above, which reduces down to $30M annually, if the conservative (strictly exogenous) banking model is assumed, where the source of developers’ loans is the available escrowed funds themselves. The exogenous model of banking business assumes that loans are funded by deposits; in this instance, developers’ loans can be sourced from the pool of escrowed funds [34]. On the other hand, the endogenous model makes no assumption as to the funding source of the loans, lacking the conservatism of the estimates. Thus, we opt to use the average of both models for the reported central estimate. This estimate is developed by authors here: https://disk.yandex.ru/i/sZ6V3mXBLvx6KA (accessed on 10 April 2025)).

These gains would be subject to a corporate profit tax of approximately 20%. However, the precise net financial benefit to banks will depend on yet unelaborated factors such as the interest rate ultimately extended to developers upon the unfreezing of escrow accounts and the proportion of project costs that will be typically financed by developers through equity under the new dispensation.

Importantly, outside the mortgage channel, escrow systems won’t constitute an additional burden on banks’ liquidity or funding sources. This is because the capital held in escrow originates directly from apartment buyers, aligning inflows of funds and loan originations closely, apart from minor timing discrepancies at the bank’s escrow portfolio level.

4.4. Land Valuation Implications

The transition to escrow plans significantly alters the temporal distribution of development cash flows, particularly FCFFs and FCFEs. The variants of our model indicate that these shifts exert substantial upward pressure—approaching 90%—on ground rents, reflecting the revaluation of land’s contribution within the project capital structure (Lines of the “DCF” tab). At constant land shares, this increment in residual land valuation has the potential to be capitalized into higher land prices at development land auctions administered by the Tashkent city government.

4.5. Fiscal Implications of Escrow Plans for Government Revenue

The fiscal ramifications of the escrow regime are multifaceted. Most directly, the government stands to gain from increased corporate income tax revenues derived from the interest income earned by commercial banks managing escrow accounts—estimated at approximately $10 M annually for the city of Tashkent (i.e., 20% tax on gross bank interest earnings of $50 M., as explained above). Additionally, the consolidation of apartment payments under escrow arrangements will facilitate a more efficient and accelerated collection of the VAT tax, especially as the phase-out of DDY-related pricing concessions narrows the tax base leakage. The government will also be a beneficiary of escalated development land prices, should this effect materialize as envisioned above.

On the spending side, the potential substitution of mortgages for staggered DDY payments will put a pressure on the government to subsidize interest rates on such mortgages, as starting from 2026 mortgages, including mortgages in the subsidized category, are expected to become available not only for purchasing the completed properties, but also for off-plans with the degree of completion 50% and above (https://podrobno.uz/cat/economic/ipoteku-i-subsidii-na-zhile-teper-mozhno-budet-poluchit-do-zaversheniya-stroitelstva/?sphrase_id=9060345, accessed on 19 April 2025). However, the total present amount of annual mortgage rate subsidies for Tashkent is reported not to exceed $30 M per year (https://www.lex.uz/ru/docs/6906825#6910504, accessed on 19 April 2025), therefore any such increment in the subsidy costs won’t offset the estimated incremental taxation benefits.

5. Discussion

This Paper and freely available associated Excel files offer a comprehensive three-statement financial model of construction in two variants (DDY and escrows) attuned to the conditions prevailing on the Tashkent development market as it prepares to transition to compulsory escrow plans. This is making the utilitarian object of this paper fulfilled, having regard to the identified literature gap on three-statement financial modelling of escrow plans. Additionally, we have pursued the associated aim to apply the model to a representative development case study in order to be able to generalize across the developments and draw industry-level inferences regarding the implications of transitioning to compulsory escrows in Tashkent city. While the use of representative-development financial models, generally (see Araya [35]), as well as in similar escrow settings (Chayetskiy et al. [21]), is not novel, we have demonstrated the capacity of such an approach specifically concerning developing markets, where other ex-post data-driven analytical approaches fail due to the paucity of published data. Additionally, we have extended the three-statement financial analysis of developments to bear on the issue of demand-driven land pricing—by suggesting and implementing a version of FCFF-reliant residual land valuation (Lines 136–139 of “DCF” tab) based on [29].

In the context, we have shown that developers are expected to benefit from the transition to escrows due to the disappearance of the need for steep off-plan discounts. Financial-leverage induced benefits will also be there for them, albeit of small secondary importance due to the high nominal and real cost of borrowed funds in Tashkent. Therefore, the reliance on equity funding of projects is expected to increase to substitute for the outgoing use of buyers’ advances. This will have a seemingly paradoxical effect of reducing developers’ ROE against the background of improved internal rate of return on equity cashflows (IRR (FCFE)). Additionally, such an increase in total equity required to start up new development projects with escrow plans—by almost two times, regardless of the loan funding scenario—is expected to bring about the consolidation of the development industry in Tashkent.

Aggregating the proposed representative development model to the industry level, we noted that the banking institutions will also be able to share in the additional rental surplus generated from the increased number of property sales at headline prices (i.e., the disappearance of off-plan discounts). Thus, in financial terms, the benefits to these parties (developers, escrow banks) will come at the expense of costs to apartment buyers—even though the latter may indeed be incentivised to sacrifice paying extra amounts to enhance the security of their transactions. Thus, our findings are in line with Kimaru [19] and Shepina [20] in that the transition to escrow plans may be associated with the escalation of the real level of apartment prices paid in Tashkent city and will also serve to consolidate market players in the development market.

Efficiency Considerations for Escrow Policy and Policy Recommendations

Why could the escrow approach be deemed to be superior to its predecessor scheme? Because of expansionary efficiency gains, that is, inflationary social improvements, on which account government revenue would be expected to increase. Here, we attempt to discuss the underpinnings of a social improvement or a failure thereof and the methodological requirements for its study, prospecting possibilities ahead of the actual data, which will, of necessity, be required for sound ex-post analysis.

In detail, one has concluded a redistribution from buyers to banks (of up to $50M annually on the receiving end of the latter), whereby the loss of the discount by buyers would profile a social loss, as the gain by banks would not outweigh it, let alone their compliance.

However, if the absence of escrow schemes featured bad debts by developers then the loss of buyer discounts could be socially outweighed by developer compliance; inversely, if it did not feature bad debts such that compliance would not outweigh the loss of buyer discounts, the redistributive effect to banks should be appraised in terms of the investment and consumption multipliers of the involved agents (buyers vs. banks).

Social gains are expected in the first case and contingently in the second, and government revenue improvement accordingly.

Want of hard data on developer compliance could be symptomatic of bad debts or not, and is an endemic asymmetry that undermines Uzbekistan’s market efficiency and competition pursuits.

In brief, the escrow scheme leads to a redistribution of surplus and an increase in overall nominal project profitability/bank income, with potential for net societal benefit depending on how the enhanced security is valued and how increased government revenues are utilized. Even by conceding that there may result no social gains in view of compliance socially outweighing all costs, it could still be that the investment multiplier of banks is higher than that of buyers, answering the question of who uses the funds most effectively, all else equal: banks presently or households under the old scheme? We leave such an answer up to future research

Because of the foregoing, and in the light of high real interest rates in Uzbekistan, our policy advice will be to suggest operating the old (DDY) and the new (escrow) schemes in parallel on the Tashkent primary property market—as the Escrow Decree YP-11 indeed suggests, albeit on the abbreviated timescale of the 6-monthly transitioning period. It should be left to the competitive forces of the construction market to decide which apartment funding mechanisms prevail in the future. With developers offering both options in parallel at differential pricing, the apartment buyers, being fully cognizant of the risks and costs of both arrangements, should be free to choose which plan to opt for.

Policy makers should also be cognizant of the need for explicit and fair regulation of the level of interest rates charged by escrow banks on project finance extended to developers, to help counter the risks of having the developers pass through the costs of the escrow scheme to the apartment buyers.

6. Conclusions

We have undertaken a systematic analysis of the transition to escrows on the Tashkent primary residential property market. While our analysis was ex-ante, which can be regarded as its patent limitation, our results and findings return quantifiable predictions in line with those research hypotheses mentioned in the introduction section and from the reviewed international literature sources. These findings can later be tested ex-post as escrow schemes are actually implemented for Tashkent city developments. We, thus, aim to switch to this latter mode of analysis as an avenue open for our future research work.

Finally, attention has to be drawn to the inherent limitations of the representative development approach used. While the amalgam representative project embraces representative market statistics from published market reports (e.g., [11]) and accentuates modal market features, in view of public domain considerations its elements conform to no specific actual architectural or engineering project, so the level of its profiling and detailization is indubitably somewhat less than to be expected in the accomplished financial models of actual development projects. This is also because, with the instrumentality of the representative project, the aim was to apply the analysis and draw conclusions valid specifically at the market level, and not at any project level.

The representative project approach also helps in de-cluttering the model from minor peripheral details meaningful for actual projects, to help perceive its structural gist more clearly. However, any use of our proposed model template for actual development practice, albeit possible, will require a considerable further contextual elaboration of the model, even in the same institutional context.