Research On Concession Period Identifying For TOT Project Financing Based On Real Options

Public infrastructure is the public utility construction facilities, which provide public service to the life of residents and production. are used to ensure the social and economic activities of the normal operation of public service system. In the modern society, requirements of public infrastructure gradually improving with the development of economic. Good public infrastructure is not only conducive to protect and improve the quality of life, will also accelerate the social and economic development, promote social progress. However, a long time and huge investment restrict the development of public transport infrastructure, especially for developing countries, economic exchanges become closer and stepped into the orbit of rapid economic development and the construction of public infrastructure is badly behind, besides, the government's financial resources are limited, resolve contradictions is difficult by government's effort alone. Study on how to use multiple financing methods of raising money, improve business efficiency and reduce costs are very positive. At present, the study on financing mode of public infrastructure are mainly concentrated in TOT, BOT, ABS and so on. And research. in operation of our country infrastructure construction, TOT financing mode achieve the goal about reinvigorating the stock and introducing advanced technology. However, As one of the key problems in licensing agreements, the concession period of TOT financing mode are not easily defined so far, which has aroused widespread concern. For the government, the concession period is too long means that the infrastructure of sovereign risks, and for the private sector, the concession period is too short for the realization of their profit goals. In this paper, the problems of typical cases are summarized, the problem tree is established. Using the method of Probability analysis to evaluate the risks and the value of project by considering real options, and gives some new ideas to measure the reasonability of concession period. And in the end, use the project cases of roads and tunnels of GJ-DT to demonstration the model.