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Development of the balance mechanism between the operation quantity-guaranteed and royalty-computed alternatives within BOT projects

Journal of Financial Studies

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Field Value
 
Title Development of the balance mechanism between the operation quantity-guaranteed and royalty-computed alternatives within BOT projects
 
Creator Chao Chung Kang
Szu-Chi Huang
 
Description There have been few studies to explore the relationship between risk-sharing and revenue-sharing within BOT projects, although many studies have explored issues of risk-sharing and revenue-sharing separately. However, to achieve the objectives of risk management and revenue-sharing it is critical, during the operational phase, to construct a balance mechanism between risk-sharing and revenue-sharing for BOT projects. In this paper we have shown a mathematical model for assessing risk-sharing and revenue-sharing based on income-guaranteed and royalty computed alternatives and then taking into account a balance mechanism.
The mathematical model describes the relationship between risk-sharing and revenue-sharing using the real option approach from the public utility viewpoint.
Additionally, this paper conducted a case study with the Taipei Port Container Logistic BOT project to find the operation income-guaranteed and royalty computed income, respectively. Results of the case study show that the developed model can be applied to describe the relationship between risk-sharing and revenue-sharing for BOT projects and the balance mechanism between the public utility and the private-sector.
Key words: BOT project; demand risk; risk-sharing; revenue-sharing; quantity-guaranteed; royalty.
 
Publisher Journal of Financial Studies
財務金èžå­¸åˆŠ
 
Date 2011-03-10
 
Type —
 
Format application/pdf
 
Identifier http://www.jfs.org.tw/index.php/jfs/article/view/2011078
 
Source Journal of Financial Studies; Vol 17, No 2 (2009); 111
財務金èžå­¸åˆŠ; Vol 17, No 2 (2009); 111
 
Language —