An Optimal Investment Portfolio for BOT Freeway Projects from the Perspective of Transportation and Construction Enterprises

Build-Operate-Transfer (BOT) plays a significant part in promoting the construction of freeways. Due to the long construction period and large investment, many uncertain factors affect the inputs, outputs, and returns of freeway projects during the construction and operation periods. For project investments, funds, returns, risks, and other relevant factors of the projects should be considered, evaluated, and balanced. This paper presents the perception of net present value (NPV) at risk to solve the uncertain financing parameters of BOT freeway project. This paper analyses the critical indicators of BOT project investment, and establishes an investment portfolio decision-making model for BOT freeway projects to maximize the NPV of the project portfolio. Based on the proposed model, this paper calculates the optimal investment portfolio with real constraints from financial perspective. At last, an investment portfolio case study is also provided to test the proposed model.