My personal experience on BOT (Build-Operate-Transfer) contract refers to typically outsourcing contract spans across multi-years that need to "build" an infrastructure / asset from scratch (totally green field), after that "operate" by the provider who did the "build" for a period of time and then "transfer" back to the customer.
What subjects do you recommend for a research paper to working on this topic?
Not sure the above question is coming from technical, process or commercial contacting angles etc. Perhaps you can explore the following:
Why BOT and not just merely BT + Training? What are the pro & cons on each approach? Which one attracts lower risk, lower cost & higher benefits?
When customer chooses BOT e.g. in IT infrastructure outsourcing, how to ensure automation / future improvement is embedded in the BOT contract? (because since it is BOT, provider might use more labor during the "Operate" phase so that they can charge customer more cost, but if tool automation is to replace labor in future due to technology advancement, total cost can be reduced)
For some customers, BO is easily achieved - but when come to "Transfer" back to customer after multi-years contract, there can be an issue provider not willing to do so as they are having higher "bargaining power" vs customer's. Or may be they will negotiate for another round of "Operate" contract renewal. How to address this issue?
During half-way the tenure of BOT, what happen to asset ownership when the BOT contract is terminated? E.g. in BOT IT outsourcing, infrastructure & application software might still own by the provider but incidents, transaction & other data in the storage can own by the customer? Also through BOT project for a very special / unique infrastructure or asset - who will own the Intellectual Property, is it the provider or customer?
the above are just some non-exhaustive examples / topics for research, you can explore more on what subjects you should perform a research by identifying which industry you will be focusing on.
No matter how, you need to find a research problem or sweet spot why you need to embark on a BOT research.
A type of arrangement in which the private sector builds an infrastructure project, operates it and eventually transfers ownership of the project to the government. In many instances, the government becomes the firm's only customer and promises to purchase at least a predetermined amount of the project's output. This ensures that the firm recoups its initial investment in a reasonable time span.
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, 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 Thailand, Turkey, Taiwan, Bahrain, Saudi Arabia, 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, the term used is build–own–operate–transfer (BOOT).
A BOT contract is a form of project financing, whereby a private entity receives a franchise from the private or public sector organisation to finance, design, construct, and operate a facility for a specified period of time, after which the ownership is transferred back to the funding entity.
During the time that the project contractor operates the facility, it is allowed to charge facility users appropriate fees, etc., all as stated in their contract, to enable the project contractor to recover its investment, together with the operating and maintenance costs.
BOT is a type of project financing and, as such, its key elements are:
the lenders to the project look primarily at the earnings of the project as the source from which loan repayments will be made. Their credit assessment is based on the project, not on the credit worthiness of the borrowing entity; and
the security taken by the lenders is largely confined to the project assets. As such, project financing is often referred to as a "limited recourse" financing. This is because lenders are given only a limited recourse against the borrower.
Most project finance structures such as BOT are complex. The risks inherent the project are spread between the various parties; each risk is usually assumed by the party, which can most efficiently and cost-effectively control or handle it.
Once the project's risks are identified, the likelihood of their occurrence are assessed and their impact on the project determined, the sponsor must then allocate such risks to the relevant parties. More specifically, its options are either to absorb the risk itself, lay off the risk with third parties such as insurers, or to allocate the risk among contractors and lenders.
The sponsor will be acting, more often than not, on behalf of a sponsor at a time when the equity participants are unknown. Nevertheless, each of the participants in the project must be satisfied with the risk allocation, the creditworthiness of the risk taker and the reward that flows to the party taking the risk. In this respect, each party takes a quasi equity risk in the project.
From the Nigerian experience BOT deals with public private partnership where government provides the space under an agreement for the private sector to develop an infrastructure, operate/commercialise the product and hand over the property to the public sector after recouping the investment with some profits within an agreed timeframe. In Nigeria, hostel blocks are built by private sector and let out to students at an affordable rate and becomes a property of the tertiary institution after the BOT contract period when the finances invested and some interest were made over an agreed period but without exploiting the students.
This is an arrangement to manage funds for infrastructural developmental activities form competent partners from the society through inviting technical and financial BIDs. Worldwide this is practised with a success.
The invested money is recovered as toll fee levied from the user. The amount and the duration is decided in consultation with the government authority.
Till date the chargeable toll fee amount estimation formula is not very clear and the amount is chargeable always at a higher rate. Scope lies to validate.
Public /user open access is not very clear to understand the BOT charges as fee.
Categorisation of infrastructure projects and fee levied after completion and period or duration of how many years the fee will be charged also urgent needed to simplified and it should be made available to public information.
Atricles
a number of articles are flooding on internet search engines and the tendering documents must be looked in to for better understanding and for doing further researches.
Under a build-operate-transfer (BOT) contract, an entity usually a government grants a concession to a private company to finance, build and operate a project for a period of 20-30 years, hoping to earn a profit. After that period, the project is returned to the public entity that originally granted the concession.