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Abstract
The Chinese government introduced BOT/PPP (build-operate–transfer/ public-private-partnership) procurement strategies in the early 1990s for the development of infrastructure such as highways, power stations etc. However, there are many risks plaguing both the government and private investors in BOT projects. The aim of this paper is to propose dynamic contract conditions which could be used to manage the risks. The paper first summarizes the main risks which resulted in the failure of BOT projects in 1990s in China through cases reviews, then discusses how the risks may be mitigated/managed through a better designed contract which focus on fairness and efficiency. Furthermore, based on analysis of the drawbacks of current contract conditions, dynamic contract conditions are proposed.
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