Wang, S Q; Tiong, R L K; Ting, S K and Ashley, D (1999) Political risks: Analysis of key contract clauses in China's BOT project. Journal of Construction Engineering and Management, 125(3), pp. 190-197. ISSN 0733-9364
Abstract
The reforms introduced by the International Monetary Fund in Asia will bring about greater transparency in the economies and innovative approaches in procurement of contracts. China has taken new initiatives in build, operate, and transfer (BOT) infrastructure projects. It is, however, important to analyze and manage the unique or critical risks associated with China's BOT projects. This is especially so after new policies were introduced in late 1996 when the first state-approved BOT project, the U.S. $650,000,000 2×350 MW coal-fired Laibin B Power Plant (Laibin B), was awarded. These include the competitive tendering process and 100% foreign ownership of the operating company. An international survey on risk management of BOT projects in China was conducted to seek the views of practitioners. The overall objectives of the survey are (1) to identify the unique or critical risks associated with China's BOT projects; (2) to evaluate the effectiveness of measures for mitigating these risks; (3) to examine the key contract clauses used in Laibin B's concession agreement; and (4) to provide a risk management framework for investing in future BOT projects in China. This paper discusses the adequacy of key contract clauses in Laibin B's concession agreement related to the political and force majeure risks in China, from the perspective of foreign developers, lawyers, and lenders. The contract clauses discussed include changes in law, corruption, delay in approval, expropriation, and force majeure. Areas for further improvement in the clauses are suggested.
| Item Type: | Article |
|---|---|
| Index terms: | approval, international survey, competitive tendering, survey, lawyer, Asia, corruption, practitioner, China, force majeure, power plant, risk management, effectiveness, ownership, infrastructure project, transparency |
| Subjects: | professional ethics, infrastructure and transport systems, professional development, Geography, economics, performance management, tendering, regions and continents, research products and data, mitigation, practitioner, data collection methods, profession, contractual role, risk assessment |
| Topics: | Roles and Professions, Risk Management, Procurement, Information Management, Engineering Principles, Geographical Context, Research Practice, Organizational Design, Contract Administration, Legal Issues, Quality Management |
| Descriptive scope: | 3 PCE |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here