The paper intends to provide an insight to the need and the available options for privatisation practices being implemented in the Third World countries. These include Private Sector Financing as Contractor financing, BOOT (Build Own Operate Transfer) financing, Subsidised BOOT financing and several others. The privatisation of different sectors in number of developing countries including Indonesia, Malaysia, Philippines, Singapore, Thailand, Turkey and Pakistan is under process. These sectors include power, public health, environment, and transport infrastructure. This research emphasises particularly on the degree of risk involved during operation phase of a road infrastructure project. This risk mainly arises from the overestimation of the toll revenues. An effort has been made to identify the sources of traffic overestimation and the degree of project sensitivity associated with it. The paper in its general layout consists of the basics involved in important options for privatisation at first and then examines the effect of reduced revenues on overall profitability of the project from entrepreneur as well as host government's perspective. An effort has been made to develop an empirical relationship among different variables of the phenomena using computer simulation technique. Finally most (from author's point of view) suitable method has been detailed and examined from economical (host government's) prospective. (A)
Abstract