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
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, Saudi Arabia, Israel, India, Iran, Croatia, Japan, China, Vietnam,
Malaysia, Philippines, Egypt, and a few US states (California, Florida,
Indiana, Texas, and Virginia). However, in some countries, such as Canada,
Australia and New Zealand, the term used is build–own–operate–transfer (BOOT).
Traditionally, such projects provide for the infrastructure to be transferred
to the government at the end of the concession period. In Australia, primarily
for reasons related to the borrowing powers of states, the transfer obligation
may be omitted. For the Alice Springs – Darwin section of the Adelaide–Darwin
railway the lease period is 50 years, see Austral Asia Rail Corporation.