Bot contracts
- 2. Most common variants: • BT: Build-Transfer • BLT: Build-Lease-Transfer • BOT: Build-Operate-Transfer • BOO: Build-Own-Operate • BOOT: Build-Own-Operate-Transfer • BTO: Build-Transfer-Operate • CAO: Contract-Add-Operate • DOT: Develop-Operate-Transfer • ROT: Rehabilitate-Operate-Transfer • ROO: Rehabilitate-Own-Operate 2
- 3. BT: Build -Transfer • A Contractual Agreement • Contractor undertakes financing and construction of a facility. • After completion hands it over to the Government. • Government reimburses the total project investment on the basis of an agreed schedule. • May be employed for all types of projects including critical facilities which for security or strategic reasons must be operated directly by the government. 3
- 4. BLT: Build-Lease-Transfer • A Contractual Agreement • Contractor undertakes to finance and construct. • On completion hands it over to the Govt. on a Lease arrangement for a fixed period. • After completion of the fixed period, ownership of the facility is automatically transferred to the government. 4
- 5. BOT: Build-Operate-Transfer • A contractual agreement • Developer undertakes construction (including financing) and operation and maintenance thereof. • Developer operates the facility over a fixed term. • Allowed to charge the facility users appropriate tolls, fees, rental to enable recovery of his investment. • User charges should not exceed amount proposed in the bid or as negotiated. 5
- 6. BOT: Build-Operate-Transfer …contd. • Developer transfers the facility to the government at the end of the fixed term. • These types of projects shall include a supply-and-operate situation: - The supplier of equipment and machinery for a given infrastructure facility –if the interest of the government so requires- operates the facility and in the process provides technology transfer and training to the government nominated individuals. 6
- 7. BOO: Build-Own-Operate • A contractual agreement • Developer undertakes construction (including financing) and operation and maintenance thereof. • Allowed to recover his total investment by collecting user levies from facility users. • Developer who owns the assets of the facility can choose to assign its operation and maintenance to a facility operator. • No transfer to the government is envisaged but the government may terminate its obligations after specified time period. 7
- 8. BOOT: Build-Own-Operate-Transfer • Similar to BOO but liable to transfer the project to the government after expiry of the specified period of operation. • Difference between BOT and BOOT is about ownership. 8
- 9. BTO: Build-Transfer-Operate • A contractual agreement. • The government contracts out an infrastructure facility to a developer • To construct the facility on a turn-key basis assuming all cost overruns, delays and specified performance risks. • Once the facility is commissioned satisfactorily the developer is given the right to collect the user fee under a concession agreement. • The title of the facilities always vests with the government. 9
- 10. CAO: Contract-Add-Operate • A contractual agreement • Developer adds to an existing facility which it rents from the government and operates the expanded project. • Collects user levies to recover the investment over an agreed period. • There may or may not be a transfer arrangement with regard to the added facility provided by the developer. 10
- 11. DOT: Develop-Operate-Transfer • A contractual agreement • Favorable conditions external to a new project which is to be built by a developer are integrated in the BOT arrangement by giving that entity the right to develop adjoining property and thus enjoy some of the benefits the investment creates such as higher property or rent values. 11
- 12. ROT: Rehabilitate-Operate-Transfer • A contractual agreement • Existing facility is handed over to the private sector to refurbish, operate (collect user levies to recover the investment). • At the end of the term the facility is transferred back to the government. • Also for purchase of an existing facility from abroad, importing, refurbishing, erecting and consuming it within the host country. 12
- 13. ROO: Rehabilitate-Own-Operate • A contractual agreement • An existing facility is handed over to the operator to refurbish and operate with no time limitation imposed on ownership. • As long as the operator is not in violation of its franchise, it can continue to operate the facility and collect user levies in perpetuity. 13