Study On Ownership Of BOT Assets

BOT mode is an important method to supply infrastructure of society, and has been implemented to a lot of projects. With the implementation of BOT mode, obstructer of ownership of BOT assets became one of the most important issues in development of BOT mode. Based on the incomplete contract, this paper develops a mathematic model to analyze ownership of BOT assets.Firstly, this paper analyzes the influence of cost reduction and quality of BOT to ownership of BOT assets. Private sector has the same incentive to enhance the quality, no matter the ownership attribute to government or attribute to private sector. Come to the cost reduction. If the private sector has ownership of BOT assets, it will have strong incentive to reduce cost. However, the private sector's incentive to reduce the cost is too strong because he ignores the adverse effect on quality. If government has the ownership of BOT assets, government can inhibit private sector's invest which lead to damage to quality, but in this case, private sector will not have enough incentive to reduce cost. On the premise of maximization of social benefits, the paper analysis allocation of the ownership of BOT assets.Secondly, this paper analyzes the influence of limited recourse to ownership of BOT assets. When government has ownership of BOT assets, it can inhibit moral hazard which caused by limited recourse. When private sector has the ownership, the moral hazard which caused by limited recourse will occur. This paper establishes deposit system, it can restrain private sector to engage in the investment of reducing the project performance standards. It can also inspire the private sector engage in the cost reduction of BOT project.