Build-Transfer-Operate with risk sharing approach for railway public-private-partnership project in Korea

To attract the private sector to railway public-private partnership (PPP) projects, the public sector is required to share risks resulted from a failure in demand forecasting. The Korean government introduced BTO-risk sharing (BTO-rs) as a new PPP arrangement to promote investments in railway projec...

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Bibliographic Details
Published in:Asian transport studies 2022, Vol.8, p.100061, Article 100061
Main Authors: Lee, Juyeon, Kim, Kyungtaek, Oh, Jaehak
Format: Article
Language:English
Subjects:
BTO-rs
Railway PPP
Risk-sharing
Sensitivity analysis
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Summary:To attract the private sector to railway public-private partnership (PPP) projects, the public sector is required to share risks resulted from a failure in demand forecasting. The Korean government introduced BTO-risk sharing (BTO-rs) as a new PPP arrangement to promote investments in railway projects. BTO-rs is to share operating costs and revenues by both the public and private sectors. This study explains the methodology of BTO-rs. Based on BTO-rs, this study conducted the sensitivity analysis for the real railway project. The result of the sensitivity analysis suggests that sharing ratio of the excess operating profit and loss of the government and demand are the most influential factors affecting the concessionaire’s rate of return.
ISSN:2185-5560
2185-5560
DOI:10.1016/j.eastsj.2022.100061