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Analysis of traffic revenue risk factors in BOT road projects in developing countries

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  • Babatunde, Solomon Olusola
  • Perera, Srinath

Abstract

The use of Build-Operate-Transfer (BOT) model for transport infrastructure projects delivery, most especially road projects has increased over the past decades. However, the growing concern is how the concessionaires will recoup their money at operation phase in BOT road projects, due to the traffic revenue risk that is highly unpredictable, particularly in developing countries. Yet effort at investigating traffic revenue risk factors in BOT road projects through an empirical method in developing countries received scant attention. It is against this backdrop that this study identified and critically assessed the traffic revenue risk factors in BOT road projects in Nigeria. This study further identified and assessed the mitigation strategies to traffic revenue risk in BOT road projects. In achieving this, the study adopted three different data gathering phases to include literature review, a preliminary survey, and questionnaire survey. The questionnaires were administered to three different primary stakeholder groups comprised public sector authorities (i.e. ministries, department, agencies), concessionaires, and lenders/banks involved from conception to operation phase of BOT transport projects in Nigeria. Data collected were analysed using mean score, Kruskal-Wallis test, and factor analysis. The study, through factor analysis, grouped the 25 identified traffic revenue risk factors into 3 principal factors. Similarly, the factor analysis classified the 19 identified mitigation strategies into 4 key factors. It is believed that this study will benefit the policymakers and other stakeholders to draw policy recommendations that will positively influence the development of BOT road projects in Nigeria and developing countries at large.

Suggested Citation

  • Babatunde, Solomon Olusola & Perera, Srinath, 2017. "Analysis of traffic revenue risk factors in BOT road projects in developing countries," Transport Policy, Elsevier, vol. 56(C), pages 41-49.
    • Handle: RePEc:eee:trapol:v:56:y:2017:i:c:p:41-49
    DOI: 10.1016/j.tranpol.2017.03.012
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    References listed on IDEAS

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