The government can get high value in GFRR through getting royalty fees from the concessionaire by means of an output-based or a revenue-based model .The royalty model of BOT projects was seldom explored in prior studies. However, this issue plays an important role in BOT negotiation. The purpose of this paper is to construct the royalty model of the BOT project based on private sectors' and government's perspectives. Net cash flow and mathematical programming approaches were employed in this study to develop the royalty model for the BOT project. A BOT project with Taipei Port Container was used as a numerical example to demonstrate the solution procedures for private construction cost ratio (PCCR), government construction cost ratio (GCC R), ongoing royalty, and government finance recovery ratio (GFRR). The results of the case show that the concessionaire will not pay the royalty to the government if the PCCR is less than 0.94 and the profit can't be maximized.
- mathematical programming model