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Understanding Build-Operate-Transfer (BOT)

Build–operate–transfer (BOT) or build–own–operate–transfer (BOOT) is a form of project financing where a private entity receives a concession contract to finance, design, construct, own, and operate a facility, enabling them to recover costs and make a return. Fees are usually raised during the long concession period, allowing the private entity to earn a satisfactory return. Examples of countries using BOT models include Pakistan, Thailand, Turkey, and various others.

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13 views1 page

Understanding Build-Operate-Transfer (BOT)

Build–operate–transfer (BOT) or build–own–operate–transfer (BOOT) is a form of project financing where a private entity receives a concession contract to finance, design, construct, own, and operate a facility, enabling them to recover costs and make a return. Fees are usually raised during the long concession period, allowing the private entity to earn a satisfactory return. Examples of countries using BOT models include Pakistan, Thailand, Turkey, and various others.

Uploaded by

Mike Jason
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Build–operate–transfer

Build–operate–transfer (BOT) or build–own–


operate–transfer (BOOT) is a form of project
financing, wherein a private entity receives a
concession from the private or public sector to
finance, design, construct, own, and operate a
facility stated in the concession contract. This
enables the project proponent to recover its
investment, operating and maintenance expenses in
the project.

Due to the long-term nature of the arrangement, the


fees are usually raised during the concession period.
The rate of increase is often tied to a combination of
internal and external variables, allowing the
proponent to reach a satisfactory internal rate of
return for its investment.

Examples of countries using BOT are Pakistan,[1]


Thailand, Turkey, Taiwan, Bahrain, Saudi Arabia,[2]
Israel, India, Iran, Croatia, Japan, China, Vietnam,
Malaysia, Philippines, Egypt, Myanmar and a few US
states (California, Florida, Indiana, Texas, and
Virginia). However, in some countries, such as
Canada, Australia, New Zealand and Nepal,[3] the
term used is build–own–operate–transfer (BOOT).
The first BOT was for the China Hotel, built in 1979
by the Hong Kong listed conglomerate Hopewell
Holdings Ltd (controlled by Sir Gordon Wu).

Forms of project finance are listed in the sections


below.

BOT (build–operate–
transfer)

BOOT (build–own–
operate–transfer)

BOO (build–own–operate)

BLT (build–lease–transfer)

DBFO (design–build–
finance–operate)

DBOT (design–build–
operate–transfer)

DCMF (design–construct–
manage–finance)

See also

References

Last edited 10 days ago by an anonymous user

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