Contract Build Operate Transfer (BOT) is a collaboration between the government and the private sector in building public infrastructure that aims to improve the infrastructure growth without spending money from the government. Application of this contract, the private sector finance, design, build, operate and maintain infrastructure facilities within a specific concession period and ending with delivery of facilities to the government without any compensation. Private parties to get revenue from the operation of these infrastructure facilities during the concession period lasted.
Thus the BOT model gives an opportunity and liberty to customers (offshore) to get Offshore Center (OC) build and operated as per their specific needs and also set up the processes in various stages to suit their business needs.
The staged process helps the client to evaluate the risks involved and also helps them to check the feasibility before investing in full-fledged manner.
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The BOT Model would typically be used for:
An organization wishes to commence business in a country where it does not haveits base. The organization would look at getting a local company to reduce risk its venture into the new country.An organization doesn’t have the expertise in that process, and wants to pool in specialized and dedicated resources to execute it. Here the organization will tie up with a mature player who already has expertise and knowledge for it.
Key points involved in executing a BOT model:An organisation does a feasibility of approach - setup the said project on its own or work on a BOT model. If opted for BOT model, then,Service providers are shortlisted and a dialogue is initiated with them.
The parameters are shared with the service providers and their intent is ascertained whether or not they would be keen to proceed with such an arrangement. It is very important to find a matured service provider as he has the right domain knowledge and expertise that helps to get the optimal returns from the investment.
The initial agreement is signed which spells out the nature of contribution that each of the participants will bring to the table. It also spells out the time duration for the transfer of project/rights. This is referred to as the `put' or `call' options i.e., whether one of the participants to the venture would put their shares to be
