Abstract: The determination of concession term is one of the main contents during the negotiation between the government and private investment group in BOT project. This paper considers the value of deferment option which embedded in the investment process of private investor in the one period Concession Term, establishes a concession term decision model including option value, and then applies this model into a transportation infrastructure project. Through comparing and analyzing with traditional Net Present Value method, the result shows that the project can acquire same expected return in shorter concession term when take the option value into consideration, and provides a decision basis for both sides during the concession term negotiation.