Economics Analysis Of Infrastructure Concessions Contract Designing

Infrastructure concession operation is an effective measure in solving the problem of insufficient governmental investment in infrastructure development and increasing the efficiency of production and operation. As the national economic system reform is gradually intensified, governments at different levels attach great importance to this measure and start to try it. Concession contract is a legislative document, in which governments grant exclusive rights to concessionaire and control the operational activities of it. The success of infrastructure concession projects depends on the designing of concession contracts. Therefore, the study of concession contracts is of great theoretical and practical significance. The designing of concession contracts involves many complex legislative and economic issues, such as the financial situations of governments, optimization of resources, protection of consumers' benefits, incentive firms to rational investment, improvement of production and operation efficiency of concessionaire, etc. With the rational return on investment as a kernel issue in the designing of concession contracts, the comprehensive economic parameters are integrated analyzed in this dissertation in order to realize the multiple targets of governments in concession projects.The basic analytical theories and methods in the designing of concession contracts are supported by the theory of government regulatin and information economics and economic evaluation of invested projects. On the base of the review of theoretical development in these fields and the study of concession contracts designing, the economic analytical methods used in the designing of concession contracts are studied in this dissertation.Under the whole designing framework of concession contracts, the choice of such main economic parameters as products or service price, concession period, rate of return on investment, governmental support in infrastructure concession contracts is comprehensively and systematically analyzed in this dissertation. Not only the special factors affecting each economic parameter but also the mutual limitation among and optimization of economic parameters are put into consideration under the condition of the overall targets of concession contracts, thus conclusions more suitable to the practical conditions are obtained.A concession contract can be regarded as a payoff contract under the framework of principal-agent theory. It needs to meet the participation constraint and incentive compatibility constraint of concessionaire. The payoff designing can be analyzed by the backward-induction method. Based on existing study findings, payoff of concession contracts, especially when the government guarantees on revenue are available, is studied under the condition of insufficiently competitive concession bidding and incomplete concession contracts in this dissertation. Main conclusion is put forward without the hypothesis of concrete patterns of demand/ revenue probability distribution. It can be used more broadly. In view of the concession biding, it is mainly studied how to choose parameters and model of bids and the distribution of bidders' type.In order to solve the choice problem of parameters in contracts, a numerical simulation method for the economic analysis of concession contracts is put forward, which simulates the present value of net cash flow (NPV) and gets the probability distribution with different parameters in concession contracts so as to establish the correlation between parameters and NPV distribution. Under the condition of asymmetric distribution of NPV probability, the probability of NPV less than 0 can more accurately describe the risk of investment retun Thenthe probability of NPV less than 0 that concessionaire may accepted determines the condition satisfied by the economic parameters of concession contracts. With the premises of expected objective value of each parameter fixed by the designers of concession contracts and the weighted value of this parameter, an optimal objectiv...