Foreign exchange and revenue risks: analysis of key contract clauses in China's BOT project

Shou Qing Wang, Robert Tiong, S. K. Ting and D. Ashley

Construction Management and Economics, 2000, vol. 18, issue 3, 311-320

Abstract: Despite the Asian financial crisis, there was still growing international interests by sponsors in China's infrastructure projects financed on build-operate-transfer (BOT) concession contracts. With the closure of the Guangdong International Trust and Investment Corporation (GITIC), foreign banks have become cautious towards new loan applications by Chinese companies and they were confused about government support and guarantees. Therefore it is important to analyse and manage the unique or critical risks associated with China's BOT projects. This is especially so after new policies were introduced in late 1996 when the first state-approved BOT project, the US$650 million 2 X 350 megawatt coal-fired Laibin B Power Plant (Laibin B), was awarded. The findings are reported from an international survey on risk management of BOT projects, with emphasis on power projects in China, with a discussion of the adequacy of the key contract clauses used in the Laibin B's concession agreement (CA) in addressing the foreign exchange and revenue risks, which include exchange rate and convertibility risk, financial closing risk, dispatch constraint risk and tariff adjustment risk. Areas for improvements to these contract clauses are suggested.

Keywords: Build-OPERATE-TRANSFER Botproject Risk Management Foreign Exchange Currency Convertibility (search for similar items in EconPapers)
Date: 2000
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/014461900370672 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:conmgt:v:18:y:2000:i:3:p:311-320

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RCME20

DOI: 10.1080/014461900370672

Access Statistics for this article

Construction Management and Economics is currently edited by Will Hughes

More articles in Construction Management and Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().