Research On Concession Term Of Urban Water Supply BOT Project

Besides the water price, the concession term is one of the most important aspects in the urban water BOT concession contracts. It determines risk sharing and benefits distribution between the government and the project investor.In the urban water BOT concession contracts the concession term consists two parts: concession term limit and concession term length. The risk sharing is mainly stipulated by the concession term limit, and the benefits distribution is determined by concession term length.From the point of view of the risk distribution, the paper qualitative analysis the concession term limit choosing of urban water BOT project. By discussing the relationships between risk management, risk distribution and concession term limit, the paper reaches the conclusion on choosing the right concession term limit of two kinds of urban water BOT project.With the use of game theory, the paper quantitative investigates the decision making of the concession term length. On how to distribute the rest benefits, paper establishes two dynamic game models between the government and the project investor under two conditions: complete information and incomplete information, and finds the optimum decision of the concession term length.