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Build-Operate-Transfer (BOT) Model

Build-Operate-Transfer (BOT) Model:

The National Highways Authority of India (NHAI) has come up with a list of high-traffic density corridors for private developers to build and operate under the build-operate-transfer (BOT) model.

  • Build-Operate-Transfer (BOT) Model is a type of agreement often used in infrastructure projects, particularly in the construction and operation of public facilities or utilities.
  • It is a conventional public-private partnership (PPP) model in which a private entity (usually a company or consortium) is granted the rights and responsibilities to design, finance, construct, operate, and maintain a specific project or facility for a defined period of time.
  • The private entity, known as the “concessionaire” or “developer,” bears the financial and operational risks associated with the project during the contract period.
  • The private company gains revenue during the concession period, while the government benefits from infrastructure development without upfront investment.
  • The specifics of the financial arrangements and incentives vary depending on the individual BOT contract.
  • BOT is particularly well-suited for greenfield projects (new projects without prior work) and large-scale, capital-intensive projects.