MEANINGS OF BOT, BOOT, BOO, BLT
BOT (BUILD, OPERATE TRANSFER)
BOT finds extensive application in the infrastructure projects and in public private partnership. In the BOT framework a third party, for example the public administration, delegates to a private sector entity to design and build infrastructure and to operate and maintain these facilities for a certain period. During this period the private party has the responsibly to raise the finance for the project and is entitled to retain all revenues generated by the project and is the owner of the regarded facility. The facility will be then transferred to the public administration at the end of the concession agreement, without any remuneration of the private entity involved. Some or even all of the following different parties could be involved in any BOT project: • The host government: Normally, the government is the initiator of the infrastructure project and decides if the BOT model is appropriate to meet its needs. In addition, the political and economic circumstances are main factors for this decision. The government provides normally support for the project in some form. (provision of the land/ changed laws) • The concessionaire: The project sponsors who act as concessionaire create a special purpose entity which is capitalised through their financial contributions. • Lending banks: Most BOT project are funded to a big extent by commercial debt. The bank will be expected to finance the project on “non-recourse” basis meaning that it has recourse to the special purpose entity and all its assets for the repayment of the debt. • Other lenders: The special purpose entity might have other lenders such as national or regional development banks • Parties to the project contracts: Because the special purpose entity has only limited workforce, it will subcontract a third party to perform