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- Title
AN ANNUALIZED RATE OF RETURN-BASED CONCESSION DURATION MODEL FOR BOT CONTRACTS.
- Authors
Min Wu; Arain, Faisal; Lyin Shen
- Abstract
The current BOT concession model (BOTCcM) was developed based on the concession period-based rate of return (ROR). In practice, the annualized ROR is more popular than the concession period-based ROR, as comparing alternative projects is difficult when durations of available alternative projects are not the same. Besides, the concession period is an unknown variable in BOTCcM, making comparisons of the benefits of alternative projects even more difficult. This study thus extends BOTCcM by developing an annualized ROR-based concession duration model for BOT contracts. The application of the new model is demonstrated using the same case quoted in BOTCcM, and shows that a different decision will be made from the new model. We provide an improved tool that is more effective than BOTCcM in determining the interval for possible negotiations between the host government and the private investor for BOT contracts.
- Subjects
RATE of return; BUILD operate transfer; INDIVIDUAL investors; PROJECT management; ENVIRONMENTAL management; DECISION making
- Publication
International Journal of Construction Project Management, 2015, Vol 7, Issue 1, p45
- ISSN
1944-1436
- Publication type
Article