The Study Of Concession Period For Build-Operate-Transfer Contract Projects-Based On Reasonable Interest Of Government

BOT (Build-Operate-Transfer) is a new type of international project financing and construction model, which started in the 1980s, mainly used for infrastructure projects. Through this model, it can effectively attract foreign capital or nongovernmental capital, to some extent, to lighten the fiscal burden of government, and impute to the debt burden or various risks, thus, can quicken the construction of infrastructures for the host government. Contemporarily, along with the application of BOT, also can fetch in overseas advanced technology and management, and improve the public service quality of infrastructures. There fore, BOT project financing has been widely used in the international and domestic infrastructure field, by virtue of its unique characteristics and advantages of financing.Along with the wide application of BOT financing, and the theory researches make for more mature, a core issue is that how to define the reasonable interest between private investor and host government effectively and rationally during the prior contractual arrangements. Simultaneously, such proceeds to define reasonable interest and arrangements between government and private investor can be realized mainly through the logical determination of concession period in the concession agreement.The concession period is one of the core elements in the concession agreement for BOT infrastructure projects. The concession period is a measure for deciding when the project ownership will be transferred from the investor back to the government concerned; it also demarcates the benefits, authorities, and responsibilities between the government and private investor. At present, upon the concession period of BOT project, prior academicians mainly based on the economic interest of BOT project, to decide concession period, and the research method mainly use NPV (net present value), through the net present value, to define the reasonable interest of private investor, and based on this, to decide concession period; However, the reasonable interest of government in the BOT Project isn't definitely defined.Based on prior academic achievements, the author, based on the principals of Public and Welfare economics,Economics,Natural monopoly, this paper analyzes the concession period on the angle of view of the BOT project internal attributes, through the standard definition of BOT project inherent attributes, takes the social welfare of BOT project as analysis object, and takes the government on behalf of public interest in the BOT project as analysis perspective, based on this, to define the constraint conditions of the reasonable interest of the government concerned. Then this paper develops an economics model upon the maximal marginal constraint condition of the reasonable interest for the government concerned. Then, through the analysis of the model parameters and the inspection of BOT project, this paper educes the conditions and scope of the application of the model lastly.