Abstract: A franchise bidding mechanism is designed for traffic BOT project from the view of the regulator.The main purpose of this paper is to design a set of bidding mechanism scientifically and reasonably to improve the allocative efficiency of franchise bidding. The model of bidding is established based on the incentive mechanism,which is to maximize the expected social welfare on the condition of participation and truly displaying the managing ability of the companies. Then,the optimal biding mechanism is obtained by solving the model. Furthermore,we implement the optimal out come by first score sealed bid and supply contract auction.

Key words: BOT, franchise bidding, multi attribute auction, incentive mechanism