Essays on Royalty under a Build-Operate-Transfer Scheme

• Main Authors: Szu-Chi Huang, 黃思綺
• Other Authors: tsun-siou Lee
• Format: Others
• Language: en_US
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/27757350237741295468

博士 === 國立臺灣大學 === 財務金融學研究所 === 99 === This dissertation is comprised of two essays on royalty under a Build-Operate-Transfer (BOT) scheme. In the context of profit-sharing, the first essay tries to link auctions/Beauty Contests and bargaining model to price royalty under information asymmetry assumption. This essay assumes royalty is the only relevant evaluation criterion in the Beauty Contest and the sole issue of negotiation, thus reducing the Beauty Contest to a first-price sealed-bid auction and the subsequent negotiation to bargaining regarding a single issue. Royalty can then be priced using traditional auction theory combined with a classical bargaining model. Furthermore, subsidy is also considered as a negative payment of a concessionaire, thus the model can price not only royalty for a profitable project but also subsidy for an unprofitable project. Some common collusive tricks are then incorporated into the bidding and bargaining game to discuss how they manipulate the royalty or subsidy. The discussion shows that when the cartel underestimates the net operating cash flows and overestimates the construction costs, it effectively decreases the royalty received by the government or increase the loss subsidy offered by the government. Finally, this study investigates a real case to demonstrate how the model works in the real world and how the private sector profits from collusion in a BOT tender. Next, the second essay in this dissertation aims at designing a balance mechanism between quantity-guaranteed and royalty-computed alternatives under information symmetry assumption. The balance mechanism makes a government retains demand risk but transfers the other risks to a concessionaire under a BOT scheme. Enforcing the balance mechanism between royalty-computed and quantity-guaranteed alternatives, a government adopts royalty and quantity demanded guarantee subsidy to adjust the actual returns of a concessionaire dynamically. Subsequently, a case study of the Taipei Port Container Terminal project shows that the balance mechanism has applicability to real BOT schemes and can be used to analyze both risk-sharing and profit-sharing issues under a BOT scheme.