BUILD OPERATE TRANSFER
Introduction
Build operate transfer is a project delivery method which establishes a well-developed public- private partnership with the clear agreement. This is an option for the government to outsource the public project to the private company.
Private sectors conduct the project offered by the government under the concession contract. During the concession period, the private sectors are responsible for financing, constructing, designing, operating and maintaining the facility. The time required by the facility’s revenue stream to clear the company’s debt and provide a profitable rate of income for its efforts and risks contribute to the duration of the concession period.
Private company act as owner during the concession …show more content…
Government possess the ownership of the project after the concession period. 2. Substantial revenues during operation phase determined the feasibility of project
3. Technology transfer and training of local personnel. 3. BOT required high capability of promoters
4. Reduce financial burden and minimise the risk on the government
5. Overcome limitation of budget in construction project
6. Boost the economy of the country by launching a project to develop the infrastructure facility.
7. Create more local job opportunity and attraction of foreign investors
8. Ensure the project feasibility due to the involvement of experienced and competent foreign private investors.
Scenario of BOT
Infrastructure investments are important to the growth of a nation’ economic. The developing countries mostly encounter the budgetary constraints to commence the development project. BOT is an option for government in funding the infrastructure project from the private sector when dealing with financial crisis.
The concessionaires (private company) will co-ordinate the construction and operation in accordance with the specification of the concession agreement. The revenues gained from the operation phase are intended to pay off the financial cost, operating cost and a return for the
Introduction
Build operate transfer is a project delivery method which establishes a well-developed public- private partnership with the clear agreement. This is an option for the government to outsource the public project to the private company.
Private sectors conduct the project offered by the government under the concession contract. During the concession period, the private sectors are responsible for financing, constructing, designing, operating and maintaining the facility. The time required by the facility’s revenue stream to clear the company’s debt and provide a profitable rate of income for its efforts and risks contribute to the duration of the concession period.
Private company act as owner during the concession …show more content…
Government possess the ownership of the project after the concession period. 2. Substantial revenues during operation phase determined the feasibility of project
3. Technology transfer and training of local personnel. 3. BOT required high capability of promoters
4. Reduce financial burden and minimise the risk on the government
5. Overcome limitation of budget in construction project
6. Boost the economy of the country by launching a project to develop the infrastructure facility.
7. Create more local job opportunity and attraction of foreign investors
8. Ensure the project feasibility due to the involvement of experienced and competent foreign private investors.
Scenario of BOT
Infrastructure investments are important to the growth of a nation’ economic. The developing countries mostly encounter the budgetary constraints to commence the development project. BOT is an option for government in funding the infrastructure project from the private sector when dealing with financial crisis.
The concessionaires (private company) will co-ordinate the construction and operation in accordance with the specification of the concession agreement. The revenues gained from the operation phase are intended to pay off the financial cost, operating cost and a return for the