Project Financing Using BOT Mechanism For Land Exploitation And Consolidation

Much arable land has been converted into non-agricultural purposes since 1980 in rural China, in line with the great development in urbanization, industrialization and fast increasing in population in urban areas. Nevertheless, this development has led to the dramatic reduction in the arable land per capita. As arable land is very important for the people, especially in China for its huge population, increasing attention has been given to the concern of the decreasing arable land and food supply crisis. In 1998, the law of land administration in People's Republic of China was reformed and introduced for implementation. Relevant policies on land exploitation and consolidation are formulated aiming at protecting the arable land and increasing its yield. Since the establishment of the law, the Chinese government has invested significant amount of resources and built up a lot of projects of land exploitation and consolidation for the benefits of the protection of land resources.However, the implementation of land exploitation and consolidation in the existing practice has experienced many problems, with the typical problems of the lack of capital and the low operating efficiency. Although various financing modes and operational methods in line with marketing mechanisms are adopted for solving these problems, their applications are of limitation. There is little study in the existing literature in investigating the effectiveness of these financing modes for implementing the projects of land exploitation and consolidation in china. This research aims to evaluate the effectiveness of the existing financing modes for implementing land exploitation and consolidation projects and investigates the applicability of the BOT financing mode for implementing land exploitation and consolidation projects.In this thesis, Chapter one describes the research background and objectives, including the examination of BOT Mechanism for Land Exploitation and Consolidation, the study of negotiating concession period and also that of monitoring the project implementation.Chapter two presents reviews on various financing modes adopted in Germany, England, America, Japan, China Taiwan and Mainland China. The literature study demonstrates that the participation of the private enterprises in land exploitation and consolidation projects is a global-wide trend for solving the problems of budget deficits and improving the operating efficiency.BOT mechanism is one of the most important financing modes, which allows private enterprises to undertake capital infrastructure construction works. Therefore, Chapter three in this study offers a detailed examination on the principles and practice of BOT financing mode both home and abroad. The examination focuses on, the relationship among the participating parties and the organization structure, property right, cash flow and financing procedure for implementing BOT financing mode to land exploitation and consolidation projects. The key factors contributing to successful implementation of BOT financing mode are identified, such as the feasibility of land exploitation and consolidation, government's support for the project, the choices of investors, the negotiation of concession, and incentive and monitor during project operation. The understanding of these issues provides important theoretical foundation for examining the applicability of using BOT financing mode to land exploitation and consolidation projects.In using BOT financing mode, there are two major attributes affecting the effectiveness of the application, namely, the negotiation of the concession, and incentive and monitor during project operation. These two attributes are in fact the key elements in the application of game theory. Therefore, the game theory is used to analyze the two attributes, and Chapter four of this dissertation presents the principles of the game theory, which forms a theoretical basis for conducting the analysis in future sections..Chapter five focuses on reviewing the research background and literatures concerning the principles and applications of concession period home and abroad. Followed by Chapter six, which introduces a negotiation model of concession period using game theory. Negotiation model of concession period under incomplete information is established in chapter seven. Negotiation model of concession period under changeable investment cost is...