Research Of Decision Mode For Flexible Concession Term In BOT Projects

Along with the continuous reform of the investment and financing system, BOT mode is widely applied in infrastructure and public systems. As one of core clauses in BOT concession agreement, the decision based on concession term directly determine the success of the whole project. By now, fixed concession term is most commonly chosen in existing BOT projects in China. However, large sum of BOT projects were not running in ideal current management. Failures caused by inexact argumentation and wrong decisions are constantly happened in the past and existing projects. Comparatively speaking, flexible concession term is more effective on allocation of risks and assures the social equity. Moreover, it has less dispute and wider public acceptance.According to this, this thesis provides a research of BOT projects with flexible concession term.In order to provide supporting references to the research on BOT projects with flexible concession period, first part of the thesis is a general description about the existing research related to concession period of BOT projects around the world. It provides basic identification of BOT and the decision-making techniques of the concession period.After that, on the basis of analyzing several typical cases of BOT projects in foreign countries, according to the difference of revenue constrain conditions of BOT projects, divide the flexible concession period to single revenue constrain mode, multiple revenue constrain mode and middle negotiations. Based on flexible concession term method, the concession term is not specifically decided at the decision-making stage of the project, government and the company only compromises a primary time length of the project, which is allowed both of sides adjust the concession term according to the actual demand and the profit, in order to achieve rational allocation of risks.In the next part, associating with the decision process and the features of each mode, give a comparison on the following aspects:basis of the decision-making, length of concession term, incentive and restraint mechanisms, supervision difficulties and the allocation of risks. The researches indicates compared with fixed concession term, flexible concession term which will be dynamic regulated based on the calculation of actual profit measurement has better performance on incentive and restraint mechanisms and allocation of risks, whereas it also adds the cost and the difficulties of supervision of the project. Finally, from the point views of revenue constrain conditions, royalties and government subsidy and finally the choosing franchisees, this thesis gives a strategy of promoting the implement of BOT in China according to the decision features of three different modes.