The Government's Legal Position. Bot Investment Research

In the past twenty years there has been a worldwide wave in theeconomic investment. As a kind of the typical project finance methods,BOT project finance has been widely put into application in businesssince it was originated in 1984. Furthermore, BOT is envisaged to bewith vast potential development capability and good prospects in thefuture. BOT is the short forth of "BUILD-OPERATE-TRANSFER". Itsmain points stated that the host government or its authorizedadministration provides the concession agreement to the foreign ordomestic project sponsors. The latter specially organized a projectcompany to undertake the implementation and management of BOTproject. BOT is a kind of limited-require project finance approach, thatis to say, as long as it is restricted in the concession period, theproject company bears the repayment responsibility of all debt. Whenthe concession period is expired, all capitals and properties of projectare unconditionally transferred to the host country.This dissertation divides into five parts.PartⅠexplains the conception and the context of the BOT.Meanwhile, the author analyses the main character and types of thisspecial investment method, introduces the develop tendency of it both inChina and in the world.PartⅡdiscusses and compares the foundation contract andsubsidiary contact in the BOT project. The purpose of this part is tobuild a logic system to examine the role of government in the BOTproject. BOT finance technique is generally used in the infrastructureprojects that are with large investment scale, long operating cycle andrelative stable return and protect. To the benefit of sponsors andinvestors, BOT structure is able to alleviate investment risk and raisefinance at a relatively low cost.In the partⅢ, the author analyses the host government, the major advantages of BOT could be concluded as follows: Solving the problemof infrastructure funding shortage to a certain degree. Helping to lightenthe financial burden of government, allocate project investment risksand avoid government's debt crisis.PartⅣ, the author suggests that contributing to the absorption offoreign advanced skills in design, construction and management,improving the project implementation efficiency should become animportant work to the government.PartⅤtries to make some point of study on BOT project financeunder the circumstances that China is involved with the world economymore and more deeply. The major viewpoints and conclusions are asfollows: In recent years, China has achieved great growth in economydevelopment, and infrastructure construction demand is increasingdramatically. However, the vast investment requirement could not bemet relying only on the government fund. Under such circumstances, itis very necessary to take BOT project finance as a new kind of methodsof utilizing foreign finance or capital especially in infrastructure projects.It will contribute a lot to Chinese investment system reform. Theplanning of utilization of BOT project finance was put forward early in"the Eighth-Five-Year-Plan" of China, and Shajiao C Power Plant inGuangdong was the first BOT project in China. Afterwards, China hasmade successful use of BOT project in many sectors.