File(s) under permanent embargo
Bargaining game model to determine concessionary items in build-operate-transfer contracts
journal contribution
posted on 2020-02-01, 00:00 authored by Morteza Bayat, Mostafa Khanzadi, Farnad NasirzadehFarnad NasirzadehThe parties involved in build-operate-transfer (BOT) projects have conflicting financial interests regarding the value of concessionary items, including concession period length and equity to debt ratio. Determining the value of these items has a crucial role for successful implementation of BOT projects, especially in BOT projects with direct-negotiation procurement. In this research, first, a financial model of BOT projects is developed according to a real-world situation of bargaining. Then, a finite-horizon alternating-offers bargaining game, as a conflict-resolution tool, is chosen and applied. Uncertainties and risks are taken into account. Based on the sponsor’s and government’s share of the project’s financial benefit, the value of concession period length and equity to debt ratio are determined taking into account the lender’s requirements. Finally, the proposed model is implemented in a real-world BOT project to evaluate its applicability and performance. The proposed model enables one to predict the final agreement on concession period length and equity to debt ratio and prevents an unsuccessful negotiation or costly renegotiations.
History
Journal
Journal of construction engineering and managementVolume
146Issue
2Article number
04019109Pagination
1 - 16Publisher
American Society of Civil EngineersLocation
Reston, Va.Publisher DOI
ISSN
0733-9364eISSN
1943-7862Language
engPublication classification
C1 Refereed article in a scholarly journalCopyright notice
2020, ASCEUsage metrics
Categories
No categories selectedKeywords
Licence
Exports
RefWorks
BibTeX
Ref. manager
Endnote
DataCite
NLM
DC