A Study On Incompleteness Problem Of Infrastructure Concessions Contract According To Breach Remedy Theories

Infrastructure concessions are considered by cooperation between public and private sectors to enhance the level of public service model. It is a long-term transaction with complex situations. Infrastructure concession contracts can not to fully predict all possible or provide in each case the behavior of the government and investors in advance. Only stated in the case of predictable behavior of both sides and provide some general principles and procedures of unforeseen circumstances. Parties to the contracts negotiate and coordinate. The key problem of infrastructure concession contract is investment efficiency.In the concession agreement,the government would make certain concessions and facilities commitments,to encourage investor enthusiasm. From the dynamic point of view, despite the long-term commitment are favorable to the implementation of contracts. However,lack of commitment,the Government could use its strong position,and constantly modify the contract, to tighten the stimulation for private investors,the resulting ratchet effect,private investors can take advantage of information superiority,take the action of"hold-up"and reduce private investment.Contract usually through breach remedy provisions to restrict the parties of contract. Replace with breach remedy,the contract can make up incomplete. Breach remedy can encourage the parties of contract to make the best relationship specific investment decisions. So the actions taken are even close to the Pareto optimal behavior.Therefore,as an administrative concession contract,infrastructure concession contracts should be remedied both from the administrative and contractual aspects. This paper analyzes the efficiency of liquidated damages, specific performance,expectation damages and reliance damages. The Comparison is based on the influence on relationship specific investment decisions. The standard is Pareto efficient. The article concludes that liquidated damages enable to achieve Pareto,make optimal investment level,and improve investment efficiency.Finally,the conclusions of the analysis used to examine the model text of Infrastructure concession contracts,and tried to offer some suggestions.