Title :
Ownership Structure and Contract Efficiency in BOT Projects
Author :
Shi, Lei ; Xiong, Songping ; Dai, Dashuang
Author_Institution :
Sch. of Manage., Dalian Univ. of Technol., Dalian
Abstract :
Based on the game theory, this paper formulates the concession agreement as an incomplete contract model to investigate the effects of different ownership structures on the efficiency of Build-Operate-Transfer (BOT) project. If the ownership is attributed to the private sector, it has stronger incentive to engage in cost reduction investment. However, the moral hazard arises from the incompleteness of contract and limited recourse. For instance, the private sector might engage in the investment of damaging the project performance. On the other hand, the government ownership can control the project performance, but provide little incentive for the private sector to reduce the project costs. This paper is concluded that the efficiency of BOT project is accomplished under the private sector ownership when the deposit system is introduced to restrain the moral hazard.
Keywords :
contracts; cost reduction; game theory; government policies; incentive schemes; investment; project management; BOT project; build-operate-transfer; building infrastructure; concession agreement; cost reduction investment; game theory; government ownership; incentive; incomplete contract model; limited recourse principal; ownership structure; private sector ownership; Asset management; Buildings; Contracts; Costs; Ethics; Game theory; Government; Hazards; Investments; Project management;
Conference_Titel :
Wireless Communications, Networking and Mobile Computing, 2008. WiCOM '08. 4th International Conference on
Conference_Location :
Dalian
Print_ISBN :
978-1-4244-2107-7
Electronic_ISBN :
978-1-4244-2108-4
DOI :
10.1109/WiCom.2008.1776