Optimal selection of build–operate‐transfer projects on transportation networks

This paper considers the problem of how to select highway projects for the build–operate‐transfer (BOT) development with the objective of improving the social benefit while ensuring the marketability of those selected. The problem can be viewed as a tri‐level leader–follower game and is formulated as a mixed integer program with equilibrium constraints. Without solving the associated problem, we show that optimal tolls and travel times on selected BOT highways can be determined from their attributes under mild assumptions. This leads to an efficient heuristic algorithm for solving the project selection problem.