Research On The Application Of BOT Business Model In State - Owned Large - Scale Construction Enterprises

In the process of modern industrialization and urbanization, with the rapid continuousimprovement of the China’s economy and the people’s living standards as well as the spillovereffects of the infrastructure to the regional economic development more and moresignificantly, the social demand is increasing, both the speed and the scale of the constructionis much more bigger than ever. At present, the capitalist countries introduced a strong stateintervention on the basis of a market economy and strengthen the role called the "visiblehand". Impacted by the macroeconomic policies of the state, in order to reduce the financialburden on the State and prevent the risk of the government debt, the direct investment of thegovernment on infrastructure has been gradually shrinking. Because of the limited financialresources, a single channel can not meet the needs of the financing development for thegovernment. In this condition, the construction enterprises in the infrastructure constructionprocess began to try a variety of new business models as the basis for the construction of themain areas of application mode of BOT projects, more and more government intervention inmarket mechanisms and a combination of mixed economic characteristics widespread concernin the industry. Therefore, the analysis and research of the construction on the implement ofthose large state-owned enterprises BOT business model has got a practical significance.Firstly, this essay discussed the concept of starting the business model, then introduced thedefinition and evolution of the business model of BOT, and BOT business model forapplication status at home and abroad for analysis. Combined with the situation of China’slarge state-owned construction enterprises BOT business model, discussed the necessity andfeasibility of construction enterprises to implement BOT business model transformation.Currently, due to the construction business scope, mode of operation and viability ofconvergence, homogeneous competition significantly, more and more irregularities arebreeding. During the transformation period of the planned economy to a market economy,construction enterprises as the main body of market competition, not only the physical fitness,but also the mechanisms are still large room for the improvement. The state-ownedconstruction enterprises are experiencing excessive competition, such as severe test disorderlymarket, bidding prices down, bidding Loaning, project payment arrears and so on. We believethat the implementation of BOT construction enterprise business model transformation inregulating industry, generally enhanced their competitiveness has significant role in thepromotion. BOT mode is main way for those large state-owned enterprises biding thereinvestment into the government construction and financing process, which can speed up the operation of large state-owned construction enterprise scale,development is conducive tolarge state-owned construction enterprises to improve investment efficiency, diversifyinvestment risks,and introduce a series of advanced technology and management methods, toimprove the quality and efficiency of construction projects in the construction and operationmanagement.Secondly, considering the representative of A company in the industry, the author chose Acompany as the study case. According the analysis of its internal and external environment,the author used “SWOT” analysis framework to explore the specific path of A companyimplementing BOT model, as well as the strategic foundation and management. Through themethod of case study, the whole process of specific projects in BOT operation were analyzedand summarized. Finally, the author analyzed and discussed the operation problems andassociated risks on the perspective of practice from the BOT model.Studies have shown that,during the period of A company run by the BOT model to overcome of return on investmentand a mismatch between the increase of capital scheduling capabilities, reduce investment andfinancing risks. Credit policy for BOT projects are facing, construction, market, political andother risks, construction companies should be recognized promptly and properly allocated tothe participants shared. Through in-depth cooperation with the lending banks, commercialinsurance companies, other official facilities of economic, technical means of small,decentralized and shifted risks.Based on previous studies, this essay deeply discussed the significance, necessity andfeasibility of large state-owned construction enterprises to participate in BOT mode ofoperation. This essay also use case study approach to investigate on the BOT model ofenterprise project,study the model of empirical analysis, the project situation and theimplementation of the results, and discussed the problems of the BOT model, the risks andcountermeasures on this basis. It will provide a theoretical basis for the construction andoperation of the program business enterprises to implement the BOT model.