Risk Management for Build-Transfer plus Land Usage Fee Reimbursement Delivery Method in China

摘要

To meet the large demands for infrastructure and public facilities in the rapid urbanization process, the Chinese government has issued a series of regulations for promoting private investments and participations. Among different applications of private investment, build-transfer (BT) method was widely explored for not-for-profit infrastructure and public facilities. First, private investors finance and build infrastructure and public facilities, indirectly promoting urban area and house market development. Later, the government gets land usage fees (LUF) from real estate developers and pays the private investor back using LUF. This BT plus LUF delivery method is an innovative way to solve the dilemma between "development" and "fund shortage" in China. However, the risks such as long construction period, high investment, and obstacles in land acquisition make it difficult to implement. This paper attempts to illustrate the mechanism and risk management of this delivery method. An ecological small town located in central China was used as a case study. Based on literature review and characteristics analysis of the case, a list of initial risk factors was proposed. A questionnaire survey was then conducted, based on that, 28 risk factors were allocated between the government and the private investor, and ranked according to their significance scores. Furthermore, control measurements for the top four government-responsible risk factors were discussed. The results create a systematic risk management framework including risk identification, risk evaluation, and risk response, which can provide a reference for risk management of foreign or domestic investors in China.