Wang, S Q; Tiong, R L K; Ting, S K and Ashley, D (2000) Evaluation and management of political risks in China's BOT projects. Journal of Construction Engineering and Management, 126(3), pp. 242-250. ISSN 0733-9364
Abstract
The potential slowdown of the economic growth in China has led the government to increase spending in basic infrastructure such as roads, ports, and power generation facilities. There are opportunities in the infrastructure sectors for foreign investors. It is important however to identify and manage the unique or critical risks associated with investments in China's infrastructure projects. Such issues have received special attention with the closure of the Guangdong International Trust and Investment Corporation in 1998 and the subsequent confusion over government support and guarantees. This paper is based on the findings from an international survey on risk management of build-operate-transfer (BOT) projects in developing countries, with emphasis on infrastructure projects in China. It discusses specifically the criticality of the political and force majeure risks. Based on the survey, the following critical risks, in descending order of criticality, are identified: Chinese Parties' reliability and creditworthiness, change in law, force majeure, delay in approval, expropriation, and corruption. The measures for mitigating each of these risks are also discussed.
| Item Type: | Article |
|---|---|
| Index terms: | power generation, economic growth, infrastructure project, build-operate-transfer, risk management, force majeure, investor, government support, China, infrastructure sector, corruption, survey, international survey, guarantee, approval, developing country |
| Subjects: | industry analysis, infrastructure and transport systems, professional ethics, sociology, development economics, Geography, contract structure, economic development, energy systems, contractual arrangements, research products and data, mitigation, risk assessment, contractual role, government bodies, data collection methods |
| Topics: | Geographical Context, Research Practice, Engineering Principles, Procurement, Governance, Sustainability, Stakeholder Management, Risk Management, International Construction, Legal Issues, Contract Administration |
| Descriptive scope: | 3 PCE |
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