Qz The Highway Bot Project Risk Management Study

In the 18th century, Adam Smith wrote in his famous book The Wealth of Nations,"The reform of transportation will be the most effective one in all kinds of reforms."It has been proved by the history of Human beings that transportation is of vital importance to the economical and social development of a nation or an area. Among all transportation infrastructure facilities, the construction of highway has been one of the key factors to enlarge the civil demand as well as to promote the development of the domestic economy, which is of strategic significance to the industrial layout and economical development.According to the State Highway Net Planning, the total length of the highways in our country was approved to be 85000kms by the State Council in 2005. The large-scaled construction of high-ways, coupled with the considerable cash-demand, offers great blueprint to all kinds of investors. However, since it has not been a long time for the government to allow the cash from the individuals and the society to join the high-way investment and the relative policies still need improvement, it is somewhat risky for the investment subjects to invest in highway constructions on a BOT base.Grounded on the theory of project financing and starting with the BOT project financing model, the article first defines the BOT project financing model, demonstrates its development and practical application into the highways, both domestic and foreign, and illustrates the standard procedures of BOT project financing in the construction of highways. Then the article expounds the evaluation and identification of risk, discusses the relative theories on its policy-making and management and thus exposes the whole process of the risk management of BOT project financing. Finally, the article presents, with examples, suggestions on the elusion and precaution of risk. In brief, the article analyses the BOT project financing model and risk management, applies the qualitative analyses and quantitative assessment to the case of a highway in our country, and, with the bases on BOT project financing model and the identification, evaluation and elusion of risk, figures out the proposals on how to elude the risks and construct quality highways in a BOT highway project, in order that the government's infrastructure facility be put into immediate effect and the investors be rewarded reasonable investment income.