A Stochastic Concession Model for Infrastructure Projects Under Build-Operate-Transfer Schemes

Concession period is a key factor in the arrangement of a build-operate-transfer（BOT） contract. This paper proposes a stochastic concession period model for infrastructure projects under a BOT scheme, which takes into account the impact of risks and the risk attitudes of the private investor and the...

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Bibliographic Details
Published in:Shanghai jiao tong da xue xue bao 2016-06, Vol.21 (3), p.320-327
Main Author: 朱莹华 徐峰 胡昊
Format: Article
Language:English
Subjects:
Architecture
Computer Science
Computer simulation
Construction
Contracts
Electrical Engineering
Engineering
Governments
Infrastructure
Intervals
Investment
Life Sciences
Materials Science
Stochasticity
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Summary:Concession period is a key factor in the arrangement of a build-operate-transfer（BOT） contract. This paper proposes a stochastic concession period model for infrastructure projects under a BOT scheme, which takes into account the impact of risks and the risk attitudes of the private investor and the government. A hypothetical case is simulated by using the Monte Carlo simulation method to illustrate the proposed model. The results indicate that even for a project with the same estimations, the concession interval can be different and depends a lot on the risk attitudes of the private investor and the government. The proposed model provides a more reasonable concession interval based on which a specific concession period can be obtained through negotiation between the two parties.
ISSN:1007-1172
1995-8188
DOI:10.1007/s12204-016-1728-x