The Risk Sharing Contract for BOT Projects

This paper mainly discusses the optimal risk-sharing contract for BOT projects. For the private company, because of the uncertainties, coming from supply and demand, they cannot evaluate or is unwilling to bear the huge risks. So the society will be confronted with a long term shortage of infrastructures. Through applying the guaranteed lowest income for companies and competitive bidding, government can stimulate company to take part in the construction of infrastructures. On this foundation it also carries on the design to the government administrative behavior in the other public projects.