BUILT OPERATE AND TRANSFER(BOT)

INTRODUCTION

1.0 INTRODUCTION

Buid operate transfer contract is a process when private institutions was build one project of
infrastructure, it will do the process of project and lastly they will transfer the owner of project to
government . In this situation , government just be a firm customer and they will do a promises

to buy at least the amount that they want from that project. This is to makesure that the firm
recoups for their first investment in their range of period.
Other than that, in investopedia they will use this system in difficult project with long term of
period. For an example, we can see in water treatment and power plants. In this case , that
company will move the or running the facilities and government will act as both the consumer
and regulator. BOT realise that the wide application in infrastructure project and in public-private
partnership. In framework of BOT for third party, such as public administration , th lead for
private sector for they to build infrastructure and to handle and want the facilities its take a long
period to finished . in his period, private sector have a responsible to increase the finance for that
project and can take the results what they have make and the owner that they mention. The
facility will transfer to public at the last of promises consesion without any remuneration from
private institution that invoved. Some of or all differences party can involves for any project.
For an example,The host government , usually government is the owner of infrastructure
project and also cancel if BOT model was suitable to full for our requirement . Other than that,
politic situations and our economi which is a main factor for this results. Government provided
resources in this project will any way.

ADVANTAGES

The majority of construction and long-term operating risk can be transferred onto the BOOT
provider.
I.

BOOT will make the construction have increase their water level rapidly. This schemes
doesnt have any problem with finance, have a small number of expertise or have a
problem with project arrangement . It have a good income to handle BOOT to complete
the construction and can do operation of schemes fastly
For any person that handle BOOT will give confidence about this schemes and its will

II.

make other trust, especially water users . Next encourage the uses in this schemes from
III.

initial level
Do not have preliminary cost for water user to release more capital for on-farm to do

IV.

anything fastly. This will give them positive effect , for users to get a thing fastly
Also can used an output based purchasing model, tender proses will improve maximum
innovation. It can make the design easily to take rith this scheme. We can make this

V.

process is built into tender process more traditional

VI.

if the performance target is not fulfilled.

DISADVANTAGES

i-

BOOT maybe will make our costs more higher than water user. This is a results from
BOOT supplier that take a risk 100 percent . premium level need to pay to BOOT has

ii-

not yet been determined.

iii-

Community and water users maybe have a negative reaction with involvement of
private sector in this scheme, especially if the private sector is belong to international

iv-

company.
The fully advantage are from economy construction cant be happen if the supplier of
BOOT is single source entity as a local businesses. Because they maybe cant to
provide a materials and give a service to BOOTs supplier, especially during
construction. Although local supplier maybe can compete on personally components
from schemes, or share the project in individual company, this will make its more

v-

difficult to local business to finished their project

CASE STUDY
Examples of BOT in Asia
BOT is a common form of PPP in all sectors in Asian countries.

The Bangkok Mass Transit System Public (BTS), the elevated train system in Bangkok, is an
example of BOT project. The project was implemented under a 30-year BOT concession

agreement between the concessionaire and Bangkok Metropolitan Administration (the city
Government).
A large number of BOT port and their road projects have been implemented in the region. The
Nhava Sheva International Container Terminal (NSICT) is an interesting foer ann example of
efficiency gains through a BOT project in the port sector. In 1997, the Jawaharlal Nehru Port
Trust (JNPT), India signed an agreement with a consortium led by P&O Australia for the
development of a two-berth container terminal on BOT basis for 30 years with cost of US$ 200
million. P&O finished the project before schedule and commenced operations at the new
terminal in 1999. Already the first year of operation the terminal was handle much more traffic
than expected. Private sector also resulted in impressive efficiency gains. Efficiency indicators
such as average turnaround time of ships and output per ship-berth-day at the terminal were
comparable to other efficiently operated ports in the region. The average turnaround time in
2003-04 for ships and containers were 2.04 and 1.84 days, respectively, which were far superior
to corresponding indicators for other comparable terminals in the public sector.

APPENDIX

Figure 1: The Bangkok Mass Transit System Public (BTS)

Figure 2:The Nhava Sheva International Container Terminal (NSICT)

Figure 3:the Jawaharlal Nehru Port Trust (JNPT), India

REFERENCES
http://en.wikipedia.org/wiki/Build%E2%80%93operate%E2%80%93transfer
http://www.gsd.harvard.edu/images/content/5/3/538865/fac-pub-pollalis-bot-part1.pdf
http://www.investopedia.com/terms/b/botcontract.asp