PROS AND CONS OF BUILD OPERATE AND TRANSFER

This article explores the advantages and disadvantages of the Build Operate and Transfer (BOT) form of project procurement in the public sector. It uses the full range of financial and technical market resources to procure a project. The promoter or concession company seeks equity funding from investors and long-term financing from banks and other institutions. The concession company uses contractors to construct the facility and normally employs specialists to operate it for the concession period. Normally, some form of government assistance is required for the project. Advantages of BOT for governments include reduced development and infrastructure budget and transfer of risk to the concession company. Advantages for the concession company include better management of many construction risks, and possible countering of any adverse effects by benefits during operation. The article discusses: (1) the concession agreement; (2) arrangements for financing the concession; (3) operating standards; (4) revenue provisions; (5) the bid; (6) construction contracts; and (7) refinancing. BOT projects require concession companies and all participants to concentrate on the main purpose of construction projects, the provision of a given facility at a given price. The complex disputes that they generate need careful management.

• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/0041414X
• Corporate Authors:

  Morgan-Grampian Limited

  30 Calderwood Street
  London SE18 6QH,   England 
• Authors:
  • Atkinson, D
• Publication Date: 1996-3

Language

• English

Media Info

• Pagination: p. 52-4
• Serial:
  • Tunnels & Tunnelling International
  • Volume: 28
  • Issue Number: 3
  • Publisher: Progressive Media Markets, Ltd
  • ISSN: 0041-414X

Subject/Index Terms

• TRT Terms: Budgeting; Construction; Contractors; Contracts; Costs; Federal government; Financing; Investments; Payment; Standards; Tenders
• ITRD Terms: 137: Bid; 257: Budget; 3655: Construction; 146: Contract; 136: Contractor; 224: Cost; 244: Financing; 183: Government (national); 227: Investment; 272: Payment; 187: Specification (standard); 137: Tender
• Subject Areas: Administration and Management; Construction; Finance; Marine Transportation;

Filing Info

• Accession Number: 00725439
• Record Type: Publication
• Source Agency: Transport Research Laboratory
• Files: ITRD
• Created Date: Sep 26 1996 12:00AM