Risk Concession Model for Build/Operate/Transfer Contract Projects
Publication: Journal of Construction Engineering and Management
Volume 131, Issue 2
Abstract
This paper extends the build–operate–transfer (BOT) concession model (BOTCcM) to establishing a risk concession model for BOT contract projects. The decision for a concession period is one of the most important decisions in determining a BOT contract. BOTCcM presents an alternative method to assist in determining a concession period that can protect the basic interests of both the investor and the government concerned. However, there is a major limitation in using the model, namely it gives no consideration to the impacts of risks on the estimation of various economic variables in the model. This study considers the risk impacts to the BOTCcM model and presents an additional risk concession model. This model provides an approach for formulating a concession period to consider the impacts of risks and, at the same time, protect the basic interests of both the investor and the government concerned. A hypothetical case is used to show the procedures of formulating the risk concession period through the assistance of the Monte Carlo simulation method.
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Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 131 • Issue 2 • February 2005
Pages: 211 - 220
Copyright
© 2005 ASCE.
History
Received: Feb 28, 2003
Accepted: Mar 16, 2004
Published online: Feb 1, 2005
Published in print: Feb 2005
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