Build Operate and Transfer: Infrastructure Essay

493 WordsOct 11, 20142 Pages
Build, Operate and Transfer ECO-101- BCA | AbstractWhy do Govenrments across the world implement PPP (Public, Private Partnerships) to develop Infrastructure. Vinay Goyal (Tata Consultancy Services) Cost-Benefit Analysis | Build, Operate and Transfer ECO-101- BCA | AbstractWhy do Govenrments across the world implement PPP (Public, Private Partnerships) to develop Infrastructure. Vinay Goyal (Tata Consultancy Services) Cost-Benefit Analysis | Infrastructure Development Projects Any country’s development pace can be ascertained by looking at the country’s infrastructure of Transportation and communication. India has embarked upon a journey to create world class highways. Most of the highways currently being built in the country are built using a BOT (Build, Operate and Transfer) system which can be compared with outsourcing. Here we are trying to do a cost-benefit analysis of why the Government is adopting this mechanism. The contract eventually results in a WIN-WIN scenario. Bot Framework¹: In the BOT framework a third party, for example the public administration, delegates to a private sector entity to design and build infrastructure and to operate and maintain these facilities for a certain period. During this period the private party has the responsibility to raise the finance for the project and is entitled to retain all revenues generated by the project and is the owner of the regarded facility. The facility will be then transferred to the public administration at the end of the concession agreement. ¹Source: Wikipedia Costs: The costs for the government is generally a one time investment setting up an agency to select vendors for doing the work. Since the above department once created can be used repeatedly across multiple infrastructure projects it provides several benefits whilst the government creating its own departments to do the
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