The Study On Contract Renegotiation Of PPP Project Based On Soft Budget Constraint

The PPP model has become an important form of organization in China’sinfrastructure construction. In reality, construction and operation of the PPP projectfinancing both have success and failure or distress. For a distressed project, Whetherthe government should rescue and When and how the government will rescue, thepaper analysis them based on the essence of Long-term contract of the PPP project.There are three decades of rapid economic growth in china, which create the"China miracle”. The local government’s championship system is considered animportant promoter of this miracle. The paper study on government’s championshipsystem in detail, and derive the relationship between the system and the soft budgetconstraint, contract renegotiation of the PPP project, establish a dynamic game modeldescribed in the conceptual basis. The paper studies when and how government willrescue a distressed project and what impacts government’s rescue behavior has onproject procurement and management. The paper also provides a theoreticalframework to understand the dynamic behavior of the involved parties for the PPPproject.