Because market risk exists in many infrastructure project financing,private investor asks government to provide guarantees.These guarantees result in risk for government.The paper proposes the risk allocation strategy based on LPVR concession mechanism.It analyzes the government aim in concession contract.It demonstrates that LPVR mechanism can realize the social optimization of concession contract.It compares LPVR mechanism with fixed term concession contract.Finally,it analyzes the characteristics and application of LPVR.