Legal Analysis And Research BOT Project Risks

BOT (Build-Operate-Transfer)as the1980s worldwide of the rise of a new investment and financing, private capital surplus will be introduced into the host countries in the field of public infrastructure, is very effective in reducing the burden on the host government construction funds, reducing the host government debt risk and improve operational efficiency of the country’s infrastructure projects. In the next few decades by various countries around the world, especially in developing countries, welcome, BOT investment and financing has been considerable development. However, due to the history of BOT is not long, the people of this investment does not compare profound understanding of the risks worth more research. BOT project risks through legal analysis and research, we will be more conducive to explore the use of BOT financing this new way to effectively solve the contradiction of the host country government public funding shortages and economic development of the infrastructure urgent demand. At present, China has not been able to establish a relatively complete legal system BOT framework, and the existing laws and regulations on BOT and BOT can not meet their development needs. If we can build a relatively complete legal system BOT framework, will be resolved to run the risk of BOT project which faces a profound practical significance.Based on the briefly discussion on the BOT which is a way of investment and financing, the author revealed the variety of risks that may arise in the course of the operation, and put forward the corresponding solutions according to different types of risks. At last, combining with our country’s practice of using BOT, the author put forward his own legislative outlook.Five parts contained in the Paper are as follow:In the first parts, the author started to explore the significance of BOT from the research status and developing trend of it.The second part is the main body of this article. Firstly, the legal character of BOT project and the relationship in the participants were to be analyzed to provide substantial theoretical premise for researching this complex legal phenomenon. As for the legal character, the author considered that BOT is a legal behavior essentially which reasonably sells the concession. In addition, the relevant interested parties, like the project sponsors, the project company, the host government, construction contractors, lenders, suppliers, project stakeholders, etc., were described in the Paper. The author showed the parties’ legal status and the rights and obligations in the legal relationship.In the third part, the risks of BOT projects were analyzed in detail. Such risks may stem from various areas, including political risk, financial risk, completion risk, operational risk, market risk and natural risk. Describing each risk of BOT project can provide possibility to find the effective mechanism of risk aversion.In the fourth part, the effective mechanism for BOT projects to avoid legal risks was found by analyzing BOT project risks specifically. It is a solution seeking from a legal standpoint. The author presented that through risk-sharing between the various stakeholders, discussion of the basic principles of risk-sharing, situation of sharing can make sure the well function of the BOT project risk-sharing mechanisms. At the meanwhile, the author made a clear legal character of the concession agreement, put forward to establish the guarantee system in relevant government. In addition, the author argued the way of settlement the investment disputes including the consultations arbitration and litigation.In the last part of this Paper, the author analyzed the BOT legislation status of China combining the practices, and summarized the current problems existed in BOT legislation. According to problems arising in the practice, the author put forwarded his own legislative proposals, and expected to make a contribution to development of BOT investment.