Multicriteria Decision-Making Model for Selection of Build-Operate-Transfer Toll Road Proposals in the Public Sector

Abstract

Governments in many countries have recently begun privatizing infrastructure sectors. Some of the forces that have been driving this movement are a scarcity of public resources, increase in the demand for services, political trend toward privatization, and expansion of global capital markets. The build–operate–transfer (BOT) approach has played a growing role in the implementation of infrastructure privatization. Because of the types, uncertainty, and high risk of BOT projects, the selection process is crucial. To date, decision makers in the public sector have lacked a set of complete selection criteria or a systematic process to help them make quality selections. The main objectives are to understand the details of toll road projects so that ( a) major criteria and variables related to toll roads can be identified and ( b) an integrated decision-making process model can be developed as a framework to help the public sector make quality decisions. The methodology includes development of a multicriteria decision-making model based on the analytical hierarchy process and validated by a case study of the California Department of Transportation privatization program. The model makes the selection process clear and allows it to be traced back by all parties. That fact will likely encourage the private sector to bid on BOT projects. A framework is developed that will enable the public sector to make better decisions when selecting BOT toll road proposals and to also save decision makers time and effort.