Concessions, build-operate-transfer (BOT) projects and design-build-operate (BOD) projects are types of results-oriented public-private partnerships. BOT and BOD projects typically involve significant design and construction, as well as long-term operation for new construction (greenfield) or projects requiring significant redevelopment and expansion (brownfields). Below are definitions of each type of agreement, as well as the main features and examples for each type of agreement. This page also contains links to industry-specific checklists, toolkits and information on PPPs. BOT projects are typically large-scale infrastructure projects that would otherwise be funded, built and operated exclusively by the government. Examples include a highway in Pakistan, a wastewater treatment plant in China, and a power plant in the Philippines. Our editors will review what you have submitted and decide if you want to review the article. There are a number of variants of the basic BOT model. In the case of BOOT (Build-Own-Operate-Transfer) contracts, the contractor is the owner of the project during the project period.
Under Construction Lease Transfer (BLT) contracts, the government leases the project to the contractor during the project period and assumes responsibility for its operation. Other variants have the contractor`s design as well as the construction of the project. An example is a design-build-operate-transfer (DBOT) contract. Build-Operate-Transfer (BOT) or Build-Own-Operate-Transfer (BOOT) is a form of project execution method, typically for large infrastructure projects, where a private entity receives a concession from the public sector (or, in rare cases, the private sector) to finance, design, build, own and operate a facility specified in the concession contract. This allows the project advocate to cover their investment, operation and maintenance costs in the project. A BOT project is typically used to develop a discrete asset rather than an entire network, and is usually completely new or new (although a renovation may be required). In a BOT project, the company or project operator typically receives its revenue through a fee charged to the utility/government, rather than through rates charged to consumers. A number of projects are called concessions, such as toll road projects, which are new construction projects and have a number of similarities with BITs.  Under a build-operate-transfer (BOT) contract, a company – usually a government – grants a concession to a private company to finance, build and operate a project. The company operates the project for a period of time (perhaps 20 or 30 years) in order to recoup its investment, and then transfers control of the project to the government.
In contract theory, several authors have examined the advantages and disadvantages of grouping together the construction and operation phases of infrastructure projects. In particular, Oliver Hart (2003) used the incomplete contracting approach to determine whether incentives for ineligible investments are lower or greater when the different phases of the project are grouped under the direction of a private contractor.  Hart (2003) argues that incentives for cost-cutting investments are greater in bundling than in unbundling. Sometimes, however, incentives for cost-cutting investments can be exaggerated, as they result in too much loss of quality, so it depends on the details of the project whether bundling or unbundling is optimal. Hart`s (2003) work has been expanded in many directions.   Bennett and Iossa (2006) and Martimort and Pouyet (2008) study the interaction between clustering and property rights, while Hoppe and Schmitz (2013, 2020) investigate the implications of clustering for innovation.   There are modified versions of the BOT model to better meet different types of public-private partnership projects and needs. A bot included various types of compensation for damage suffered, but also covered alimony allowances for home repairs and tools for those living in an estate. Another, wite, was a fine imposed on the king by a criminal as an atonement for his own. A BUILD-Operate-Transfer (BOT) contract is a financing model for large projects, usually infrastructure projects, developed through public-private partnerships. BOT is usually a model used in public-private partnerships. Due to the long-term nature of the agreement, fees are generally increased during the concession period.
The rate of increase is often linked to a combination of internal and external variables, which allows the promoter to obtain a satisfactory internal return on its investment. Examples of countries using BOT include Pakistan, Thailand, Turkey, Taiwan, Bahrain, Saudi Arabia, Israel, India, Iran, Croatia, Japan, China, Vietnam, Malaysia, the Philippines, Egypt, Myanmar, and some U.S. states (California, Florida, Indiana, Texas, and Virginia). However, in some countries, such as Canada, Australia, New Zealand and Nepal, the term Build-Own-Operate-Transfer (BOOT) is used. The first BOT was for the China Hotel, built in 1979 by Hong Kong-listed conglomerate Hopewell Holdings Ltd (controlled by Sir Gordon Wu). In general, BOT contractors are special purpose vehicles created specifically for a specific project. During the project period – when the contractor operates the project they are building – revenue usually comes from a single source, an acceptance buyer. It can be a state-owned enterprise or a state-owned enterprise.