Royalty analysis for BOT projects based on the negotiation viewpoint

This study constructs three royalty negotiation models, including the lump-sum royalty, operational revenue-based royalty, and operational output-based royalty, using the bi-level programming approach. In addition, this paper also develops the iterative algorithm for bi-level programming problem for the government and the private sector. A number of factors were incorporated into this algorithm including concession rate, time value discount rate, learning rate and number of negotiations.