It is not unusual that BOT firms are granted to develop or operate certain business/project beyond the main scope of a BOT project, such as the surrounding land development. By granting these BOT project associated business, government can improve the project expected return and financial viability, and encourage potential developers to participate in BOT projects. Nevertheless, for host government, it is very difficult and subjective to evaluate the motivating effects or policy effectiveness. For developers, inaccurate valuation of associated businesses may cause serious bias during BOT project bidding process. For fund providers, such as lenders, contract design depends on accurately evaluating the overall value and risk level of a BOT project. As a result, it is crucial to accurately price the associated business. In this paper, real options theory, a dynamic asset pricing approach, is used to evaluate the associated business. Theory of mechanism design based on game theory is incorporated with the real options to investigate the government policy effectiveness and optimal policy design. A computing algorithm for valuation and optimal debt contract is developed.