Framework for Critical Success Factors of BOT Projects in China

0 downloads 0 Views 97KB Size Report
in China's infrastructure sector, there is limited litera- ture on it. ... Hunan Province (PFI [1997]), Tangshan Power Plant in. Hubei Province (PFI .... affected by many internal and external factors. The CSFs ..... 15, No.2 (1997b), pp. 67-72. ——.
AT

FO

RM

Framework for Critical Success Factors of BOT Projects in China

professor at the School of CSE, Nanyang Technological University in Singapore.

TSANG-SING CHAN

IS

AR

TI

CL

eign investment from various sources and channels into infrastructure projects using the BOT method. BUILD-OPERATE-TRANSFER (BOT) DEVELOPMENT IN CHINA

Since the first successful provincial BOT project in China, the Shajiao B power plant in Guangdong, was awarded in the early 1980s, there have been about 100 infrastructure projects featuring some form of foreign investment in China. The characteristics of these projects suit the BOT concept well. Five of them have been undertaken under the officially sanctioned 1996 BOT Guidelines. The Laibin B power plant in Guangxi was the first stateapproved BOT project in China and its competitive bidding process and tender package have won high marks from international investors. Other pilot BOT projects include the Changsha power plant in Hunan, the Puqi power plant in Hubei, the Chengdu water plant in Sichuang, and the Da Chang water plant in Shanghai. These pilot projects were planned and awarded eventually to serve as models for expanded programs in power, water, transport, and other infrastructure projects. In a nutshell, the application of the BOT method in Chinese infrastructure development is being carried out stage by stage. After some experience is gained through trial operations, the range of BOT applications will be gradually expanded.

IS

IL

LE

GA L

TO

RE

is a professor at the Department of Marketing and International Business, Lingnan University, Hong Kong.

TH

ROBERT L.K. TIONG is an associate

T

CE

is a fellow in the Department of Building at National University of Singapore.

DU

SHOU QING WANG

he growth of the infrastructure sector in China has been relatively slow compared with the industrial and manufacturing sectors. The energy shortage, an inadequate transportation network, insufficient telecommunications, and an obsolescent water supply and distribution system have created a bottleneck in the country’s economic growth. The Chinese government has invested a large amount of its budget in infrastructure projects. However, it is far from enough for sustainable development. In view of the government’s inability to provide sufficient infrastructure services to meet the ever-increasing demand, there is general consensus emerging on a larger role for private participants in infrastructure provision in China. Project sponsors, especially international infrastructure entrepreneurs seeking business in developing countries, are most suited for this purpose. The international firms bring with them not only management expertise and technical skills, but more important, credit standing and ability to finance investments. The best solutions for the problems of infrastructure development in China should therefore comprise four elements: 1) private participation, 2) commercial principles, 3) competition, and 4) innovation. The build-operate-transfer (BOT) concept provides a solution that meshes all these elements together. Therefore, the Chinese government has been trying to attract for-

PR O

LIN QIAO is a lawyer in Dalian, China.

E

IN

AN Y

LIN QIAO, SHOU QING WANG, ROBERT L.K. TIONG, AND TSANG-SING CHAN

IT

SPRING 2001

Copyright @ Institutional Investor, Inc.

THE JOURNAL OF PROJECT FINANCE

53

All rights reserved.

THE OBJECTIVES

In light of the above, the general objective of this study is to enrich the reader’s knowledge of BOT projects in China and to identify and analyze the relative importance of the CSFs in every phase of such projects.

54

This research study employs a combination of methods for an integrated qualitative and quantitative research methodology that included three stages. The first stage is a comprehensive literature review together with documented experiences, unstructured interviews with professionals, and lessons learned from successful BOT projects to identify the CSFs associated with China’s BOT projects (World Bank [1998]; Baker & McKenzie (B&M) [1996]; Lam [1999]; Tiong [1990a, 1990b, 1997a, 1997b, 1997c]; Wang et al. [1998, 1999b, 2000b, 2000d]). The BOT projects in China, e.g. Shajiao B Power Plant (Hopewell Holdings Co. [1988]), Laibin B Project (Wang et al. [2000a]), Yan’an Second Tunnel (Zhang et al. [1998]), Da Chang Water Plant in Shanghai (Chew [1997]), Changsha Power Plant in Hunan Province (PFI [1997]), Tangshan Power Plant in Hubei Province (PFI [1996]) etc., are additional references for the study. About 50 factors associated with BOT projects in China initially are identified and placed in six basic phases for BOT project implementation. These phases are 1) preliminary qualification evaluation phase, 2) tendering phase, 3) concession award phase, 4) construction phase, 5) operation phase, and 6) transfer phase. As the initial list of factors is long, it is necessary to condense it for evaluation. The filtration is carried out based mainly on the authors’ experience, discussion with the academic staff in authors’ universities, and case studies together with unstructured interviews and discussions with BOT project sponsors, developers, lenders, contractors, government officials, and their consultants. The final list of CSFs is then selected and a comprehensive questionnaire designed for the survey. In the second stage, a survey via questionnaires to BOT project companies and government authorities is conducted to evaluate the criticality of the short-listed CSFs. In addition to the mail survey, interviews for in-depth discussion were conducted to confirm responses and explore some issues in more detail. The constructive interviews for in-depth discussions were undertaken in April 1999. All respondents were selected for in-depth personal interviews. Each interviewee was asked to express his views relating to BOT projects. The average interview took 30 minutes to complete, with a range from 20 minutes for the shortest interview to two hours for the longest one. In the third stage of case studies, three BOT projects in China are studied in detail so as to provide confirmation of the survey findings. Case studies can provide detailed

FRAMEWORK FOR CRITICAL SUCCESS FACTORS OF BOT PROJECTS IN CHINA

Copyright @ Institutional Investor, Inc.

SPRING 2001

All rights reserved.

Email: [email protected] for reprints or permission.

The Procedure

--->

Although the BOT concept is becoming popular in China’s infrastructure sector, there is limited literature on it. A few papers (Macdonald [1997]; Shen et al. [1996]; Tam [1995]; Wang et al. [1998, 2000a, 2000b, 2000d]; Zhang et al. [1998]) focused on the evaluation and management of risks associated with China’s BOT projects. Wang et al. [1999a, 1999b, 2000c] also proposed a risk management framework for China’s BOT projects and examined in detail the suitability of related contract clauses. There has been no research to date on the critical success factors (CSFs) of China’s BOT projects. For project sponsors, the road to winning and successfully managing a BOT project is not easy. The process of project development is complex, time-consuming, and expensive. The financial risk is high, competition is keen, negotiations are extensive, and opportunity costs are considerable. Thus, BOT sponsors must take calculated risks and adopt flexible attitudes. Their proposals must be adaptable to changing circumstances and government demands. However, if project promoters properly sustain and manage these factors, they should be successful in winning and managing Chinese BOT projects. Tiong et al. [1992, 1996] qualitatively described the importance and characteristics of six CSFs that are vital for project promoters in their endeavors to win BOT contracts. These factors are 1) entrepreneurship, 2) picking the right projects, 3) a strong team of stakeholders, 4) an imaginative technical solution, 5) a competitive financial proposal, and 6) inclusion of special features in the bid. Winning the contract is, however, only the first step in BOT project implementation. From identification of a suitable project, through construction and operation, to the final transfer to the government, these phases may take a long time. Each phase’s success determines the fate of the next phase. For a successful BOT project, sponsors must pay attention to the CSFs in every phase.

THE METHODOLOGY

It Is Illegal To Reproduce This Article In Any Format.

LITERATURE REVIEW

Operational Measures

The first part of the questionnaire is on the background of the projects. The second part contains questions about the CSFs associated with the six phases in China’s BOT projects. The last part of the questionnaire is designed to obtain information on other CSFs and suggestions for future BOT projects. The questionnaire is written in both English and Chinese to facilitate easy reading and compatibility of understanding. The CSFs in this questionnaire are itemized. The respondents are asked to rank each CSF in accordance with a scale of importance. The scale is as follows: 4 = extremely critical; 3 = critical; 2 = fairly critical; 1 = not critical; NA = no opinion. Questionnaire Administration

The Information Department at the State Statistical Bureau in China assisted in collecting questionnaires

Data Analysis

To find the differences and similarities of opinions on the relative importance of CSFs, the study compares the views of respondents from BOT project companies (hereinafter referred to “project promoters” or Group 1) with those of government authorities (hereinafter referred to “government officials” or Group 2). After coding and transcribing the data collected in the survey, the authors conduct reliability tests to ensure that the scale produces consistent results if repeated measurements are made. According to the result, Cronbach’s alpha of variable items of the questionnaire and factor items in factor analysis is greater than 0.6, which indicates that the internal consistency is high (Nunnally [1978]). The OneWay ANOVA data analysis technique is also employed to test the difference between Groups 1 and 2. All analysis is conducted using SPSS for Windows. This article first briefly summarizes the CSFs of BOT projects in China and their relative importance. It then presents in detail the framework for evaluating those CSFs.

SPRING 2001

Copyright @ Institutional Investor, Inc.

Email: [email protected] for reprints or permission.

In China, a central or local planning authority (such as a province, autonomous region, or municipality) where a project is located proposes and gives initial approval for a BOT project. There are 81 listed BOT projects in China at present. This survey targets the BOT project companies based in Hong Kong and China and related local authorities in charge of such projects. Because BOT projects require close cooperation among investors and various government departments, it is important to have a clear understanding of the importance the government attaches to the CSFs.

--->

The Survey Sample

and arranging discussions and interviews with selected professionals. To ensure that respondents from BOT project companies were upper-level managers, the questionnaire was sent to the managing directors in Hong Kong and China. Senior officers in local governments and authorities in charge of BOT projects were also chosen. During the two-month period after the first questionnaire mailing, a total of 30 valid questionnaires from project companies were received, which accounted for a response rate of about 37%. The reliability of survey results is high because all of the respondents are at top management levels in their companies and representatives of BOT projects such as power plant, highway, railway, port, and water conservancy were included. More important, most of them (66.6%) have experience in international BOT projects, almost all (86.6%) have business experience in China, and one-third have been involved directly in Chinese BOT projects. Statistical analysis also shows that their answers have low deviation and a high confidence level. Exhibit 1 shows the distribution of usable responses from BOT project companies. In addition, a total of 28 completed questionnaires from local government authorities are received, which accounts for a response rate of about 30%. All respondents are at, or higher than, deputy chief of related departments in the authorities.

THE JOURNAL OF PROJECT FINANCE

55

All rights reserved.

It Is Illegal To Reproduce This Article In Any Format.

information to supplement that obtained from a mail survey. Therefore, it is meaningful to study in detail the unique or critical factors associated with China’s BOT projects from practical examples. Finally, a framework for evaluating the CSFs for investing in China’s future BOT projects is proposed. The framework reflects the importance and characteristics of the CSFs in supporting the competitive strategies for BOT projects. The authors hope this framework will help foreign investors improve their decision-making process for investing in Chinese BOT projects. If potential BOT promoters pay special attention to this framework, they will increase their chances of securing profitable BOT projects and implementing them smoothly.

Email: [email protected] for reprints or permission.

EXHIBIT 1 Critical Success Factors in Chinese BOT Projects Criticality

Concession Award Phase

Transfer Phase

Significance

SD

Rank

Mean

SD Rank

Appropriate project identification

3.40

0.81

1

3.42

0.78

1

0.939

Stable political and economic situation

3.27

0.87

2

3.25

0.85

2

0.944

3.17

0.79

3

3.05

0.72

5

0.574

3.14

0.66

4

3.13

0.85

3

0.820

3.10

1.05

5

2.92

0.83

6

0.482

Lack of funds for infrastructure project

2.89

1.07

6

3.08

0.88

4

0.490

Competitive tendering system

3.21

0.82

1

3.04

0.95

1

0.501

Attractive financial package

3.00

0.85

2

2.96

0.71

2

0.121

Acceptable toll/tariff levels

2.97

0.81

3

2.96

0.81

3

0.970

Technical solution advance

2.93

1.03

4

2.65

1.00

4

0.923

Select suitable project agencies

2.83

0.87

5

2.46

0.78

5

0.106

Concrete and precise concession agreement

3.20

0.92

1

2.96

0.86

3

0.329

Reasonable risk allocation

3.17

0.79

2

3.13

0.80

1

0.849

Special guarantees by the government

2.87

0.82

3

3.13

0.85

2

0.263

Multilateral investment guarantee agency insurance

2.82

0.98

4

2.73

0.77

4

0.714

3.59

0.57

1

3.21

0.72

1

0.038*

3.55

0.63

2

3.02

0.90

2

0.002*

Standardization of engineering contract

3.20

0.92

3

2.96

0.86

3

0.329

A multidisciplinary and multinational team

2.83

0.97

4

2.63

0.92

5

0.442

Good relationship with government

2.66

1.04

5

2.79

0.93

4

0.621

Management control

3.41

0.73

1

3.33

0.82

1

0.707

Training local staff

3.07

0.87

2

2.83

0.92

2

0.343

Sound environmental impact

2.77

0.77

3

2.80

0.67

3

0.160

Public safety

2.55

0.87

4

2.72

0.72

4

0.546

Technology transfer

2.97

0.93

1

3.00

0.93

1

0.896

Operation in good condition

2.87

0.86

2

2.92

0.78

2

0.825

Overhauling guarantees

2.53

0.86

3

2.88

0.97

3

0.558

Construction Quality control and supervision Phase Select suitable subcontractor

Operation Phase

Local Officials

Mean

Preliminary Favorable legislation regulations Qualification The capability of project Evaluation promoter Phase Experience with BOT project by promoter

Tendering Phase

Foreign Investors

--->

Critical Success Factor

* Denotes a significant difference where the significance P < 0.05.

56

FRAMEWORK FOR CRITICAL SUCCESS FACTORS OF BOT PROJECTS IN CHINA

Copyright @ Institutional Investor, Inc.

SPRING 2001

All rights reserved.

It Is Illegal To Reproduce This Article In Any Format.

Project Phase

A BOT project involves various procedures that are affected by many internal and external factors. The CSFs in this study may not be the exact criteria for every project, but they were derived through the research process of extensive literature review and interviews with professionals involved in BOT projects. They were validated through survey research and case studies. The CSFs cover a full range of important aspects of BOT projects and represent a mutually exclusive set of factors that helps to develop a framework, depicted in Exhibit 2, for evaluating CSFs of China’s BOT projects. The framework reflects the importance and characteristics of the CSFs in supporting the competitive strategies in BOT projects and encompasses the following 13 components: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

Appropriate project identification; Stable political and economic situation; Attractive financial package; Acceptable toll/tariff levels; Reasonable risk allocation; Selection of suitable subcontractor(s); Management control; Technology transfer; Successful preliminary evaluation phase; Winning BOT contracts; Successful construction phase; Successful operation phase; Successful transfer phase.

The first eight components are independent variables while the last five are dependent ones. In Exhibit 2, arrows that show the direction of postulated influence indicate causality between components. The solid lines together

P1: The greater the appropriate project identification, the higher the possibility of good outcome in the preliminary phase of a Chinese BOT project. China has openly declared BOT as the main means of privatizing public services and has drawn up a long list of projects for foreign investors to undertake. However, foreign investors must be cautious in selecting appropriate projects and preparing proposals. There should be a demonstrated and accepted need for the project in China. The cost of the project should be reasonably within what the foreign investment sector can afford. Foreign investors naturally will be most interested in those projects that have the greatest potential to be “commercially” profitable. They will invest in a project if they are reasonably certain that they can recoup their investment, as well as making an adequate profit. Therefore, appropriate project identification has a positive effect on outcome of BOT projects in the preliminary evaluation phase. P2: The more stable the political and economic situations, the better outcome the BOT projects will achieve in the preliminary evaluation phase. Successful application of the BOT concept requires a stable political and economic environment. The political will and economic stability of the host government to support the project are important. A stable and supportive political climate is a precondition for a BOT project. Rapid economic expansion has created the largest infrastructure market in China. As part of its effort to attract foreign investment into the infrastructure sector, the Chinese government has repeatedly demonstrated its intention to adopt BOT contracts in infrastructure investments. However, at present, the authorities are cautions in speeding up the approval of foreign currency financing for BOT and other projects because of the Asian financial crisis. Therefore, it is necessary to carefully reexamine projects and the assumptions they are based on, taking into account the updated economic and political situation for foreign investors.

SPRING 2001

Copyright @ Institutional Investor, Inc.

THE JOURNAL OF PROJECT FINANCE

57

All rights reserved.

Email: [email protected] for reprints or permission.

FRAMEWORK FOR EVALUATING CSFs OF BOT PROJECTS IN CHINA

Preliminary Evaluation Phase

--->

Exhibit 1 summarizes the CSFs and their relative criticality in each phase of Chinese BOT projects based on survey respondents’ ratings in terms of mean and standard deviation (SD). The analysis shows that there is a positive agreement between foreign investors and government officials on the importance of these CSFs, even though the order of ranking on importance of the CSFs may be a little different. For details, please refer to Qiao et al. [2000a, 2000b].

with the arrows hierarchically show how some determinants influence other determinants. The dotted lines show the other factors that may influence the project involved to a certain extent. The framework of propositions, as indicated by the links between the constructs, reflects a number of the potential relationships that are supported by the survey results and the case studies. Eight propositions are developed in five categories as explained in the following sections.

It Is Illegal To Reproduce This Article In Any Format.

CSFs AND THEIR CRITICALITIES OF BOT PROJECTS IN CHINA

Email: [email protected] for reprints or permission.

EXHIBIT 2 The Framework for Critical Success Factors of BOT Projects in China

Appropriate project identification Stable political & economic situation

Attractive financial package Acceptable toll/tariff levels

P1

Successful preliminary evaluation phase

P2

P3 P4

Reasonable risk allocation

P5

Select suitable subcontractor

P6

Management control

Technology transfer

Winning BOT contracts

- Favorable legislation & regulations - Capacity of project promoter - Experience with BOT project by promoter - Lack of funds for infrastructure

- Competitive tendering system - Technology solution advantage - Select suitable project agencies - Concrete & precise concession agreement - Special guarantees by the government - MIGA insurance

Successful construction phase

- Quality control & supervision - Standardization of contract - A multidisciplinary & multinational team - Good relationship with government authorities

P7

Successful operation phase

- Training local staff - Sound environmental impact - Public safety

P8

Successful transfer phase

- Operation in good condition - Overhauling guarantees

--->

No

Project identification

BOT project successfully Implemented

58

FRAMEWORK FOR CRITICAL SUCCESS FACTORS OF BOT PROJECTS IN CHINA

Copyright @ Institutional Investor, Inc.

SPRING 2001

All rights reserved.

It Is Illegal To Reproduce This Article In Any Format.

No

P7: High level of management control will lead to successful BOT project operation. Management control is essential for successful operation of a facility. Contemporary network planning techniques and computer-based project management systems should be used in BOT projects. In order to survive under the competitive global market, the trend is toward flat organization structure to enable quick response to market changes. As such, empowerment is the approach adopted by western companies. However, the employee maturity level has to be high before empowerment can be implemented effectively. In China, where employee maturity still has to be developed, a more authoritative style of management will be appropriate. Transfer Phase

P8: Effective technology transfer will influence the smooth transfer of BOT projects. A significant trend in BOT projects has been the requirement for transfer of advanced technology through a concessionaire from a more developed country to the local participants in projects in less developed countries. Technology transfer increasingly has been focused on management techniques, distinct operating methods, and ultimate project production technology. Effective technology transfer during the transfer phase has a positive effect on the performance for BOT projects. CONCLUSIONS AND RECOMMENDATIONS

Construction Phase

P6: Suitable subcontractor selection will lead to better construction performance in BOT projects. Essentially, the project company should analyze the various attributes of potential subcontractors and choose one that can best complement its own capabilities. A project company usually searches for a subcontractor that has compatible objectives, is experienced in BOT projects, specializes in appropriate technical skills with suitable management styles, and is trustworthy and financially credible. In addition to financial aspects, management

The BOT method has been proclaimed as bringing a new age to infrastructure development in China. The bilateral agreement on China’s entry into the WTO, signed by China and the United States, is expected to open up opportunities for foreign investors to penetrate into new markets in China. The potential investment opportunities described in this article have demonstrated a good future for applying BOT projects in China. The CSFs identified are important and so is the proposed framework for investing in China’s future BOT projects, as the latter reflects the importance and

SPRING 2001

Copyright @ Institutional Investor, Inc.

THE JOURNAL OF PROJECT FINANCE

59

All rights reserved.

Email: [email protected] for reprints or permission.

Operation Phase

--->

P3: The more attractive the financial package, the higher the possibility of winning BOT projects in China. The financing package should be carefully tailored to the characteristics of the project. Under the BOT model, commercial and financial considerations, rather than the technical elements, are likely to be the final determinants in awarding the BOT concession. An attractive financial package must be based on the principles of low capital cost, low operation and maintenance cost, credibility, minimal financial risk to the government, and minimal reliance on debt-servicing capability of project cash flows. A BOT investor’s ability to arrange an innovative, flexible, and attractive financial package seems to be the crucial element behind its success in winning BOT projects. P4: Acceptable toll/tariff levels have a positive influence in winning BOT contracts. Toll/tariff levels need to be reasonable from the consumer’s point of view but also adequate to compensate investors and lenders. Balancing these conflicting interests is a delicate task. Low tariffs are a priority because China is still a socialist and developing country, and the government has to protect its people from an excessive financial burden. Therefore, acceptable toll/tariff levels have a positive effect on outcome of winning BOT contracts. P5: The more reasonable the risk allocation, the greater the possibility of winning BOT contracts. Because BOT projects are financed primarily on a limited- or non-recourse basis with the cash flow generated by the project and the project assets constituting the principal project security, sponsors of BOT projects have become particularly sensitive to the need to identify and allocate risks at a very early stage of project development. Efficient risk allocation has been critical in making projects financeable.

competence and complementary skills are also essential qualities of prospective subcontractors. Subcontractor selection for a BOT project has a positive effect on the outcome of the project.

It Is Illegal To Reproduce This Article In Any Format.

Winning BOT Contracts

——. “Evaluation of Proposals for BOT Projects.” International Journal of Project Management, Vol. 15, No.2 (1997b), pp. 67-72.

Baker & Mckenzie (B&M) Co. Ltd. “Allocation and Management of Risks in Privately Financed Infrastructure Projects.” B&M Projects Group’s Project Report, 1996. Chew, A. “Da Chang Water in the Money.” Asia Pacific Market Report. London: IFR Publishing, Summer 1997, pp. 33-35. Information on the 700MW Shajiao B Power Station. Guangdong Province, China: Hopewell Holdings Co., 1988. Lam, P. “A Sectoral Review of Risks Associated With Major Infrastructure Projects.” International Journal of Project Management, Vol. 17, No. 2. (1999), pp. 77-87. Macdonald, R. “Chinese BOT Risks.” Research Report, Tokyo University, 1997. Nunnally, J.C. Psychometric Theory. New York: McGraw Hill, 1978. PFI. Changsha Project Picks National Power, issue 132. London: IFR Publishing, November 5, 1997, pp. 11-12. ——. Chinese Tangshan Power Deal Launched, issue 102. London: IFR Publishing, July 31, 1996, p. 11. Qiao, L., S.Q. Wang, L.K.R. Tiong, and T.S. Chan. “The Critical Success Factors for Managing BOT Infrastructure Projects in China.” Submitted for publication, 2000b.

——. “Comparative Study of BOT Projects.” Journal of Management in Engineering, Vol. 6, No.1 (1990a), pp.107-120. ——. “Critical Success Factors in Competitive Tendering and Negotiation Model for BOT Projects.” Journal of Construction Engineering and Management, Vol. 122, No. 3 (1996), pp. 205-211.

——. “Final Negotiation in Competitive BOT Tender.” Journal of construction Engineering and Management, Vol. 123, No.1 (1997a), pp. 1-5. ——. “Impact of Financial Package Versus Technical Solution in a BOT Tender.” Journal of Construction Engineering and Management, Vol. 121, No. 3 (1995), pp. 304-311. Tiong, R.L.K. and J. Alum. “Financial Commitments for BOT Project.” International Journal of Project Management, Vol. 15, No. 2 (1997c), pp. 73-78. Tiong, R.L.K., K.M. Yeo, and S.C. McCarthy. “Critical Success Factors in Winning BOT Contracts.” Journal of Construction Engineering and Management, Vol. 118, No. 2 (1992), pp. 217-228. Wang, S.Q. “New Tendering System for Infrastructure Projects in China.” Proceedings of CIB W092 Procurement System Symposium: Information and Management Systems in Procurement Systems, Santiago, Chile, April 2-27, 2000. Organized by the Departmento de Ingenieríay Gestión de la Construcción, Pontificia Universidad Católica de Chile. Wang, S.Q., and L.K.R. Tiong. “Case Study of Government Initiatives for PRC’s BOT Power Plant Projects.” International Journal of Project Management, Vol. 18, No. 1 (2000a), pp. 69-78.

——. “The Critical Success Factors for Tendering BOT Infrastructure Projects in China.” Submitted for publication, 2000a.

Wang, S.Q., L.K.R. Tiong, S.K. Ting, and D. Ashley. “Evaluation and Management of Foreign Exchange and Revenue Risks in China’s BOT Projects.” Journal of Construction Management and Economics, Vol. 18, No. 2 (2000b), pp. 197-207.

Shen, L., K.H. Lee, and Z. Zhang. “Application of BOT System for Infrastructure Projects in China.” Journal of Construction Engineering and Management, Vol. 122, No. 4 (1996), pp. 319-323.

——. “Evaluation and Management of Political Risks in China’s BOT Projects.” Journal of Construction Engineering and Management, Vol. 126, No. 3 (2000d), pp. 242-250.

60

FRAMEWORK FOR CRITICAL SUCCESS FACTORS OF BOT PROJECTS IN CHINA

Copyright @ Institutional Investor, Inc.

SPRING 2001

All rights reserved.

Email: [email protected] for reprints or permission.

REFERENCES

Tiong, R.L.K. “BOT Projects: Risks and Securities.” Journal of Construction Management and Economics, 8 (1990b), pp. 315-328.

--->

Tam, C.M. “Features of Power Industries in Southeast Asia.” International Journal of Project Management, Vol. 13, No.5 (1995), pp. 303-311.

It Is Illegal To Reproduce This Article In Any Format.

characteristics of the CSFs in supporting the competitive strategies in BOT projects. However, the application of BOT projects has a relatively short history across the world and especially short in China. The BOT method may not be well understood and sometimes may not be well received by foreign investors and government agencies handling it. This may affect the accuracy of selecting CSFs. Therefore, the proposed framework based on these CSFs is only conceptual and qualitative. It needs further modification and testing. Examples of the modification may be fine tuning the CSFs and developing a semiquantitative framework.

Email: [email protected] for reprints or permission.

——. “Foreign Exchange and Revenue Risks: Analysis of Key Contract Clauses in China’s BOT Project.” Journal of Construction Management and Economics, Vol. 18, No. 3 (2000c), pp. 311-320. ——. “Political Risks: Analysis of Key Contract Clauses in China’s BOT Project.” Journal of Construction Engineering & Management, Vol. 125, No. 3 (1999a), pp. 190-197. ——. “Risk Management Framework for BOT Power Projects in China.” The Journal of Project Finance, Vol. 4, No. 4 (1999b), pp. 56-67. Wang, S.Q., L.K.R. Tiong, S.K. Ting, D. Chew, and D. Ashley. “Evaluation and Competitive Tendering of BOT Power Plant Project in China.” Journal of Construction Engineering & Management, Vol. 124, No. 4 (1998), pp. 333-341. World Bank. “Infrastructure for Development.” World Development Report. New York: Oxford University Press, 1998, pp. 176-202.

SPRING 2001

Copyright @ Institutional Investor, Inc.

THE JOURNAL OF PROJECT FINANCE

61

All rights reserved.

It Is Illegal To Reproduce This Article In Any Format.

--->

Zhang, W.R., S.Q. Wang, L.K.R. Tiong, S.K. Ting, and D. Ashley. “Risk Management of Shanghai’s Privately Financed Yan’an Donglu Tunnels.” Journal of Engineering, Construction and Architectural Management, Vol. 5, No. 4 (1998), pp. 399-409.