BOT Full Form

What is the full form of BOT?

A build-operate-transfer (BOT) contract is used for financing large projects, normally infrastructure projects like roads, bridges, developed through public-private partnerships. Under a build-operate-transfer (BOT) agreement, an entity or a body (usually some government) grants some concession to privately-owned companies to sponsor, build, and operate a project for the time period of 20-30 years, hoping to earn a profit in return. After that period is over, the project is returned to the public body that initially granted the concession to build the project.

Framework of a BOT Contract

A BOT contract can be broken down into three simple distinct parts:

• Build: A privately owned company makes an agreement to build a public infrastructure project on behalf of the government.

• Operate: After the construction is complete, the company starts to operate and handle the project for a given period. During this period, companies recoup their outlay and begin earning profits.

• Transfer: After the previously agreed upon period, the company transfers its ownership rights back to the public body.

Working of Build-Operate-Transfer (BOT) Contracts

Under a build-operate-transfer (BOT) agreement, an entity or a body (usually some government) grants some concession to privately-owned companies to sponsor, build, and operate a project for the time period of 20-30 years to recoup its money invested and then shifts control back to the government. Examples include a state highway in India, a wastewater treatment facility in the Philippines and a power plant in Pakistan. Generally, BOT contractors are special-purpose companies specially formed for a specific project.