Determination of the Concession Period in a Transportation Infrastructure BOT Scheme Based on CPM Simulation

The build-operate-transfer (BOT) approach is one of the privatization mechanisms for effectively promoting transportation infrastructure developments by using private funds to construct new infrastructure facilities. But in a BOT scheme, the concession period is important to the host government because it is relative to road toll pricing, construction cost and operation. In this paper, we will develop an optimal road toll pricing models under demand uncertainty for maximize the social welfare. Then, we will simulate the project completion time based on the Monte Carlo method and ensure the construction cost. According to the scope of the profit rate, which is designed for contractors by the host government, we can figure out the scope of the concession period on the basis of the tradeoff of profit and construction cost.