Using bargaining-game theory for negotiating concession period for BOT-type contract

This paper extends the build-operate-transfer (BOT) concession model (BOTCcM) to a new method for identifying a concession period by using bargaining-game theory. Concession period is one of the most important decision variables in arranging a BOT-type contract, and there are few methodologies available for helping to determine the value of this variable. The BOTCcM presents an alternative method by which a group of concession period solutions are produced. Nevertheless, a typical weakness in using BOTCcM is that the model cannot recommend a specific time span for concessionary. This paper introduces a new method called BOT bargaining concession model (BOTBaC) to enable the identification of a specific concession period, which takes into account the bargaining behavior of the two parties concerned in engaging a BOT contract, namely, the investor and the government concerned. The application of BOTBaC is demonstrated through using an example case.

Understanding construction consortia: Theory, practice and opinions

Firms form consortia in order to win contracts. Once a project has been awarded to a consortium each member then concentrates on his or her own contract with the client. Therefore, consortia are marketing devices, which present the impression of teamworking, but the production process is just as fragmented as under conventional procurement methods. In this way, the consortium forms a barrier between the client and the actual construction production process. Firms form consortia, not as a simple development of normal ways of working, but because the circumstances for specific projects make it a necessary vehicle. These circumstances include projects that are too large or too complex to undertake alone or projects that require on-going services which cannot be provided by the individual firms inhouse. It is not a preferred way of working, because participants carry extra risk in the form of liability for the actions of their partners in the consortium. The behaviour of members of consortia is determined by their relative power, based on several factors, including financial commitment and ease of replacement. The level of supply chain visibility to the public sector client and to the industry is reduced by the existence of a consortium because the consortium forms an additional obstacle between the client and the firms undertaking the actual construction work. Supply chain visibility matters to the client who otherwise loses control over the process of construction or service provision, while remaining accountable for cost overruns. To overcome this separation there is a convincing argument in favour of adopting the approach put forward in the Project Partnering Contract 2000 (PPC2000) Agreement. Members of consortia do not necessarily go on to work in the same consortia again because members need to respond flexibly to opportunities as and when they arise. Decision-making processes within consortia tend to be on an ad hoc basis. Construction risk is taken by the contractor and the construction supply chain but the reputational risk is carried by all the firms associated with a consortium. There is a wide variation in the manner that consortia are formed, determined by the individual circumstances of each project; its requirements, size and complexity, and the attitude of individual project leaders. However, there are a number of close working relationships based on generic models of consortia-like arrangements for the purpose of building production, such as the Housing Corporation Guidance Notes and the PPC2000.

Health care rights and NHS rationing: turning theory into practice

How should we understand the nature of patients’ right in public health care systems? Are health care rights different to rights under a private contract for car insurance? This article distinguishes between public and private rights and the relevance of community interests and notions of social solidarity. It discusses the distinction between political and civil rights, and social and economic rights and the inherently political and redistributive nature of the latter. Nevertheless, social and economic rights certainly give rise to “rights” enforceable by the courts. In the UK (as in many other jurisdictions), the courts have favoured a “procedural” approach to the question, in which the courts closely scrutinise decisions and demand high standards of rationality from decision-makers. However, although this is the general rule, the article also discusses a number of exceptional cases where “substantive” remedies are available which guarantee patients access to the care they need.