Research on the Relationship among Cost Control, Technical Investment and Franchising Period in BOT Projects

Abstract:

Under the double win constraint condition between the public and private party, this paper takes VFM (Value for Money) as the evaluating indicator of the government’s earnings, uses the rate of return on investment as the evaluating indicator of the project company’s earnings in order to analyze the relationship among cost control, technical investment and franchising period. We found that the effective cost control can shorten the franchising period and hardly depend on the technical investment. If the contribution of the technical investment to the reduction of the maintenance cost is comparatively high, increasing technical investment can effectively shorten the franchising period, otherwise it has to postpone the franchising period so as to meet the earnings target of both the public and private parties when increasing the technical investment

• Periodical: Advanced Materials Research (Volumes 403-408)
• Pages: 5166-5171
• DOI: https://doi.org/10.4028/www.scientific.net/AMR.403-408.5166
• Online since: November 2011
• Authors: Zhen Hu, Jing Lei Sun
• Keywords: BOT, Cost Control, Franchising Period, Technical Investment

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