Concessionaire Selection for Build-Operate-Transfer Tunnel Projects in Hong Kong

TLDR

BOT projects shift significant risks to concessionaires, making their selection crucial, yet procurement protocols remain unproven and many countries are still learning. This study aims to benchmark emerging best practices and extract lessons from Hong Kong’s concessionaire selection process. Hong Kong’s framework, built on Kepner‑Tregoe decision analysis, is compared with global practices to enhance procurement in less experienced regions.

Abstract

A significant realignment of risks between project participants is a fundamental facet of the new procurement paradigm of BOT (build-operate-transfer). A BOT concessionaire assumes far more and deeper risks than a contractor. One critical contributor to the success of a BOT project is the selection of an appropriate concessionaire who has the necessary capacity to provide the best overall deal throughout the build-operate-transfer process. However, various BOT-type procurement protocols are not yet proven and are still being tried and tested. Many countries are at the lower ends of their learning curves. Therefore, there is a need to benchmark the best practices that have been emerging. The Hong Kong government has developed a well-structured concessionaire selection framework supported by the Kepner-Tregoe decision analysis technique. This paper analyzes and draws experiences and lessons from this concessionaire selection practice. Current concessionaire selection practices worldwide are also discussed with a view to improve the procurement process of regions lacking in such experiences or expertise.