Abstract
Build-Operate-Transfer (BOT) contracts have been widely implemented in developing countries facing budget constraints. Analysing the expected variability in project viability requires extensive risk analysis. An objective analysis of various risk variables and their influence on a BOT project evaluation requires study and integration of many scenarios into the concession terms, which is complicated and time-consuming. If the process of negotiating the financial parameters and uncertainties of a BOT project could be automated, this would be a milestone in objective decision-making from various stakeholders’ points of view. A soft computing model would let the user incorporate as many scenarios as could be provided. Extensive risk analysis could then be easily performed, leading to more accurate and dependable results. In this research, an artificial neural network model with correlation coefficient of 0.9064 has been used to model the relationship between important project parameters and risk variables. This information was extracted from sensitivity analysis and Monte Carlo simulation results obtained from conventional spreadsheet data. The resulting consensus would yield to fair contractual agreements for both the government and the concession company.
Highlights
In recent years, awareness of the sustainability aspects of infrastructure projects has been increasing around the world
One of the most popular PPP options is the Build-Operate-Transfer agreement (BOT), which takes a concession-based approach, meaning that the private partnership is based on the concept of a fixed-term concession, using various combinations of private-sector resources to design, construct, finance, renovate, operate, and maintain facilities (Grimsey, Lewis 2004)
The results of this study show that by defining specific concession terms, it is possible to estimate an appropriate value of price/student/year using the artificial neural network (ANN) method
Summary
Awareness of the sustainability aspects of infrastructure projects has been increasing around the world. Government prefers to establish a long-term partnership to motivate the contractor to accelerate the construction phase and to consider the whole project life cycle to reduce energy consumption, minimize waste, and decrease operating and maintenance costs. This approach prevents the contractor from reducing short-term construction cost at the expense of longterm value (Grimsey, Lewis 2004; Yang et al 2007). The concessionaire will recoup its capital investment from operating revenue during the concession period (Zhang, Kumaraswamy 2001)
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