A Study On Reasonable Traffic BOT Projects Concession Periods Determination Basing On Monte Carlo Simulations

In recent years, more and more traffic projects are built in BOT mode. But, the traffic BOT projects usually have a very large investment and a quite long concession period, so that there will be many uncertainties in building and operating such kind of projects. On the other hand, such uncertainties are not considered enough in common current concession period determining models, which can not guide the traffic BOT projects in practice properly.Aiming at these problems, the key factors determining the concession period are chosen and Monte Carlo simulation is used in this paper in order to build a concession period determining model which will consider risks in building and operating a traffic BOT projects, expecting to guide the traffic BOT projects in practice.The key risk factors, which can be list in importance as traffic amount>operating and maintaining cost>price>return of investment>investment amount>construction period, are fixed based on literatures summarization and cases study.A Back Propagation Neural Network model is built to forecast the original traffic amount. Then the distribution of traffic amount during the whole concession period is forecasted based on increasing rate estimation. And the distribution of the other key factors affecting concession period are also forecasted based on logistic analysis and practice research.Based on the results of the study as before, the Net Present Value (NPV) during different concession periods is simulated and its distributions are forecasted. Then the reasonable NPV during different concession period is determined based on risk allocation. Comparing the proper NPV during different concession periods with the return of investment, the concession period can be worked out.The concession determining mode built in this paper can evaluate and allocate risks in traffic BOT projects, so that it should be a practical concession determine model.