The Optimal Concession Period in the Built-Operate-Transfer Project

Built-operate-transfer (BOT) is becoming an increasingly popular option of project delivery, and the concession period is a key decision faced by both the government and private investor. Therefore, this paper aims to optimize the concession period in the BOT project by using net present value (NPV). Due to the difficulties in estimating the long-term uncertainties, this paper develops a Monte Carlo simulation model to reveal the relationship between the uncertainties and concession period. At the end, a numerical example is given to provide the optimal concession period.