Analysis on suitability of built - operate - transfer systems for Sri Lankan expressways : a case study on Colombo - Katunayake expressway (CKE)

Abstract

Sri Lankan transport network achieved a significant development during the last decade by utilizing foreign concessions and local government funds for expressway development. Road Development Authority holds the authority to operate and maintain the road system periodically and mainly travel time-saving, developed infrastructure and living standards in association with social benefit are the user benefits generated with these expressways. As a developing country, a lack of financial stability for infrastructure development by the government may lead to foreign loans and concessions. The concessions lead to rapid involvement in the fund involvement for mega infrastructure projects as the necessity and demand of the country. The Build-Operate and Transfer (BOT) concession model is becoming a trend in the privatization of infrastructure projects. For these BOT Contracts, the concession period, interest rates are becoming the critical parameters and main considerations. In this study, a model was developed to demonstrate the potentiality of applying the BOT model for an operating expressway of Colombo-Katunayake-Expressway. The demand estimation, operational and maintenance cost, and toll revenue were used as inputs to this model and financial viability was observed with different scenarios. The concession period, interest rates, and optimality of selection of BOT were decided with different criteria based on financial viability. As the Colombo-Katunayake Expressway (CKE) meets a considerable high demand for traffic in the Sri-Lankan highway network, input variables from CKE were used to demonstrate the potentiality of applying the BOT model, and optimum subsidy level was determined with the application of variable concessionary periods to minimization of the ridership guarantee, the gap in-between the accumulated revenue and accumulated costs. Also, this BOT model is modified to validate any expressway network on an urban or suburban basis by considering the traffic demand by considering the unit length costs and unit length revenues in operations with the proposed analysis for functioning expressways in Sri Lanka. By considering main operational expressways of the country, as Southern Expressway, Outer Circular Highway (OCH), and forecasted traffic on Central Expressway and proposed Ruwanpura Expressway urban and sub-urban links were defined for the developed BOT model and operational and maintenance costs and revenue for unit length basis were obtained for iv each link. Finally, this developed BOT model was described to define and evaluate any expressway link by considering different concessionaire types obtained.