Huang, Y-L (1995) Project and policy analysis of build-operate-transfer infrastructure development. PhD thesis, University of California, Berkeley, USA.
Abstract
This research investigates the contractual and institutional settings of Build-Operate-Transfer (BOT) infrastructure development. The study puts BOT success into a comparative institutional framework. This study suggests that the BOT model will survive in the long run only if it can be more efficient than traditional procurement approaches. Efficiency derives, in theory, from the privatization of infrastructure development and its associated property rights. The privatization creates several efficiency opportunities lacking in traditional infrastructure development. The realization of these opportunities is subject to many constraints. The need to address these constraints leads to five research areas: BOT institutional development, contract governance, economic governance, financial engineering, and facility scope decision. These subjects highlight political, institutional, regulatory, and transactional factors that control BOT efficiency in terms of transaction costs, financing costs, and efficiency gains from design, construction, and operation. This investigation first formulates BOT institutional development as a non-zero-sum game. Development must meet the demands of various vested interests in both public and private sectors. This concept is tested and confirmed by a comparative study on a collection of BOT legislative acts. This research then probes the relationship between BOT complexity and transaction costs. The study produces a set of instruments to create an environment in which BOT contracts can be negotiated, monitored, adjusted, re-negotiated, and enforced effectively and efficiently. An analysis of the incentive effects of BOT economic governance shows that "commercial freedom," incentive rate-of-return regulation by contract, and revenue sharing may induce moral hazard and thus credit rationing. The research also introduces the concept of "control impact" on BOT project financing; this concept highlights relationships between BOT property rights and BOT project capital structures, and leads to the discovery of an "equity gap" in BOT financing. Finally, the foregoing findings are combined to establish financial, political, and regulatory links to BOT facility scope decisions. Overall, this dissertation sheds new light on BOT complexity. The complexity suggests that BOT efficiency, and thus BOT success, depends on public/private partnership to create favorable contractual and institutional environments. Finally, a primer of suggested guidelines on BOT infrastructure development is provided as a summary of this study's major contributions.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Thesis advisor: | Ashley, D B |
| Uncontrolled Keywords: | complexity; moral hazard; financing; governance; partnership; policy; privatization; regulation; private sector; transaction cost; capital structure |
| Index terms: | transaction cost, moral hazard, revenue, infrastructure development, contract governance, property rights, regulation, financing, complexity, efficiency, policy analysis, governance, partnership, private sector, traditional procurement, comparative study, investigation, build-operate-transfer, dissertation, privatization, capital structure |
| Subjects: | financial risk, infrastructure engineering, performance management, industry analysis, financial analysis, political science, systems engineering, partnership management, data collection methods, research dissemination and communication, research design and methodology, policy studies, business, contractual arrangements, corporate governance, economic analysis, real estate economics |
| Topics: | Stakeholder Management, Procurement, Governance, Business Strategy, Cost Management, Research Practice, Engineering Principles, Urban Studies, Quality Management |
| Descriptive scope: | 4 PCTA |
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