IMPACT OF FINANCIAL PACKAGE VERSUS TECHNICAL SOLUTION IN A BOT TENDER

The technical design and the financial package are the two main components in the tender of a privatized infrastructure project let under the build-operate-transfer (BOT) contractual arrangement. This paper examines the influence of a financial package when evaluated against the technical design during the selection process. An ability to provide an attractive financial package is essential under four conditions: 1) the project is technically certain; 2) the tolls to be charged are of government's main concern; 3) competition is keen; and 4) the project viability and financing are uncertain. The author comments, however, that the importance of an innovative technical solution should not be underestimated as it can make an attractive financial package possible. In case studies, the role of an innovative technical solution was not discounted despite the great importance attached to the financial package by the governments.

Language

  • English

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Filing Info

  • Accession Number: 00711556
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Sep 19 1995 12:00AM