The Effect Of The Role Of Government Upon The BOT Concession Period And Project's Product Price

The infrastructure plays an important role to a country's economy development. However, the capital that the infrastructure needs is very large. Traditional financing method only depends on the government. Because of the limit fund, it restricts the economy's development to some extent. The contribution that BOT project financing upon the construction of infrastructure has been proved by practices. It solves the problem that the infrastructure restricts the economic development, especially to developing countries. However, there have been many failure cases since BOT financing method apply to the infrastructure. There aren't too many successful BOT projects that have been transferred to the government until now. The core question is that the government and the project company didn't make proper profit contribution and risk contribution. The solution of this problem is to make certain the concession period and the product price. The concession period and the project price can assure the profit contribution between the government and the project company. BOT concession period is not only a time index but also a economical index. The concession period and project price can influence each other. Given profit contribution, the longer the concession period ,the lower the project price. Conversely, if the concession period were shorter, the project price would be higher. So the concession period and project price count for much in the BOT project financing. The government plays a very important role to affect the concession period and the project price. The concession period and the project price are the results that the government and the project company play the Game Theory. The calculation of the government guarantee value by the means of Black-Schols and then analyzing the affection of the guarantee upon the concession period is the new field in the research of concession period. And it is also the innovation point in this paper. This paper also apply the price determinative mechanism of monopoly market in inadequacy product competition market to BOT project product's price establishment. And at the same time, this paper also analyzes the role of governmentupon the trend of product price. It is also an innovative point in this paper. This paper also analyzes the interrelation between the concession period and the product price.