Research On Moral Hazard Model Of Project Company In BOT Projects

BOT model are widely used in China in recent years, and become an important way of national infrastructure investment. It's not only able to attract private funds, improve project efficiency, but also can internalize the external benefits of the project. In 2008, in response to international financial crisis, the central government of China planned to invest 4 trillion to stimulate economic development, most of which were invested in infrastructure construction. However, since the objective function of project company is different from that of the government, and the existence of conditions of environmental uncertainty, incomplete contracts, information asymmetries, the presence of non-recourse feature of debt, the project company who pursues and maximizes personal interests has the possibility to take place moral hazard behavior. As a result, the effectiveness of BOT model can not be achieved, the project will be failure, heavy accident will happen and so on. Under this background, how to establish an effective incentive and restraint mechanism to guide the project company to carry on the project with highly effective, and to restrain the moral hazard of project company become worthy to study.Through literature research, this paper analyzes the reasons of project company's moral hazard and the production and performance situations in different structures and different flows of BOT models, and then summarizes the moral hazard of project company to two different situations: the construction period and operation period situation. Based on this, discusses the damage caused by moral hazard, and establishes a mathematical model to analyze the impact of income and social benefits of the project resulted by company's moral hazard behavior. Then propose the pointed strategy.In view of the different situations of project company's moral hazard in construction period and operation period, establish different game models separately between the government and the project company use principal-agent theory, and analyze the Bayesian Nash equilibriums when the project company breaks the contract or colludes with government inspector. Compare with the social optimal solution, point out that fully competitive bidding methods can not suppress the risk of the project company's moral hazard and the loss of social efficiency.Finally, according to the game models, introduce deposit policy and re-establish and re-solve the game models, get new equilibriums of the models. From the result of the new equilibriums, we can see the deposit policy can effectively restrain the project company's moral hazard, and get the effective range of the deposit to restrain the moral, and carry on the checking calculation through an example. At the same time, bring forward other preventive measures according to the models, and propose a recommendation to establish a guarantee system.