A determining model on total investment, project life, and concession period interval for BOT projects

To properly determine the concession period is one of the most important questions of BOT (Build-Operate-Transfer) projects. Project life and total investment are always pre-given in extant models such as ACM and RCM, which needs more discussion. Social benefit is one crucial factor for a host government to accelerate infrastructure construction by the BOT mechanism, which has been much more concerned by scholars. In this article, a determining model on total investment, project life, and concession period interval for BOT projects has been established. We unlock the premise that total investment and project life are pre-given, and aim to maximize the total benefit of the host government including economic and social benefit while ensuring that the private enterprises will receive a certain profit, finally determining the ideal project life and total investment, hence obtaining the concession period interval. The determining model enables a better progress of the negotiation between the host government and private enterprises.