Study On Against The Investment Risk Of BOT Project Of Expressway

Guided by the policies issued by the central committee of China CommunistParty and the State Council, the main issues focused on by the civil investors whichwant to invest in the area of highway infrastructure are: which investment risks theinvestors will take if they want to invest the highway BOT projects and how theinvestors are on guard to those risks in this way it is useful to realize the investmentgoals expected by the investors?The theories about the investment decisions in the modern managementaccounting play an important role in directing theoretically the investment decision inthe highway BOT projects. The investors should analyze and prove seriously theinvestment risks based on the accounting theories and the characteristics of thehighway concession, and further give the right ways which can solve these problems.The investment risks focused on by this article include the investment risksresulting from the uncertainties of operating activities and government policies. Inaccordance with the characteristics of the highway BOT projects, the uncertaintiesresulting from operating activities can be divided into the risk from the delaying of thehighway construction, the risk from the actual construction costs over their budgetcosts and the risk from the uncertainty of the future tolling traffics; the uncertaintiesresulting from government policies can be divided into the risk from the changes oftolling standards and the risk from the termination of concession agreements beforethe operating period is expired. In which the risks from the uncertainties ofgovernment policies are more focused by this article and it is a very difficult issue instudies.In accordance with the risks resulting from the operating activities, the projectcompany should take the appropriate ways according to the relationships between therisks and incomes on the basis of the useful control over the construction costs. Inaccordance with the risks resulting from the uncertainty of government policies, theprovisions of the concession agreement should be more perfected in which the systemof the tolling price adjustment should be made sure in reference to the experience in the western counties and the necessary economic rebase should be given to the BOTcompany in the case the prior termination of the concession agreement is resultedfrom the government’s decisions.May discusses involved in government policies are given by this article. Furtherdiscusses about these should be given which will be helpful to achieve the agreement.