Build-Operate-Transfer (BOT) is a form of project financing, wherein a private entity receives a franchise from the public sector to finance, design, construct, and operate a facility for a specified period, after which ownership is transferred back to the public sector. During the time that the project proponent operates the facility, it is allowed to charge facility users appropriate tolls, fees, rentals, and charges stated in their contract to enable the project proponent to recover its investment, and operating and maintenance expenses in the project. In some countries, such as Canada, the term used is Build-Operate-Own-Transfer (BOOT).
2006-08-23 16:42:05
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answer #1
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answered by J 4
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BOT: Build Operate Transfer
BOOT Build Own Operate Transfer
In general these occur when the Private Sector builds a power plant or any large infrastructural project such as a highway or bridge, and eventually the ownership and operation are Transferred to the government or public sector.
The key difference is the Ownership of the power plant after it has been built, and therefore the issues involving upgrading and capital investments.
If you are planning to invest in such undertakings, a few things to bear in mind:
1 The project must make profits prior to the transfer
2 Companies who build well do not necessarily operate well, so check their track records on both fronts
3 Ownership will matter depending on the strategy in terms of upkeep; historical track records would be a good guide.
Hope that helped.
2006-08-23 16:44:35
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answer #3
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answered by ekonomix 5
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