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    BOT Assign 1

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    Matina Bajracharya

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    © All Rights Reserved
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    BOT Assign 1

    Uploaded by

    Matina Bajracharya
    6 views10 pages

    Copyright

    © © All Rights Reserved

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    PPTX, PDF, TXT or read online from Scribd

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    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    6 views10 pages

    BOT Assign 1

    Uploaded by

    Matina Bajracharya

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 10

    BOT CONTRACT

    Presented by : thirumalesh reddy gn


    BOT Contract
    • A build-operate-transfer (BOT) contract is a
    model used to finance large projects, typically
    infrastructure projects developed through
    public-private partnerships.

    • BOT projects are normally large-scale,


    greenfield infrastructure projects that would
    otherwise be financed, built, and operated
    solely by the government.
    BOT CONTRACTUAL STRUCTURE

    Government

    Concession
    agreement
    Banks Loans Construction Contractors
    project
    Company
    Investors Share holders Operation Operators

    Raw Feed stock Offtake Users


    materials
    HOW BOT CONTRACT WORKS
     Build-operate-transfer (BOT) contract,
    an entity usually a government grants a
    concession to a private company to
    finance, build, and operate a project.

     The company operates the project for a


    period of time (20 or 30 years) with the
    goal of recouping its investment, then
    transfers control of the project back to
    the public entity.
    AGGREMENTS OF BOT CONTRACT

    1. Concession agreement
    2. Loan agreement
    3. Shareholders agreement
    4. Construction contract
    5. Supply contract (Equipment/Material/Fuel supply
    contract)
    6. Off-take agreement
    7. O & M agreement
    1. Concession agreement :
    The concession agreement is between the government and the concessionaire. The
    concession agreement is regarded as the "heart" of a BOT project as it determines the commercial
    viability and profitability.

    2. Loan agreement:
    The loan agreement is between the lenders and the concessionaire. The Banks provide
    the much necessary debt to the concessionaire.

    3. Shareholders agreement:
    The shareholder agreement is between the equity investors and the concessionaire.

    4. Construction contract:
    The construction contract is between the contractor and the concessionaire. The
    contract is usually let under fixed price turnkey contract.
    5. Supply contract:
    An agreement between the supplier and the concessionaire. The supplier in a supply
    contract is often government agency that supplies raw material such as coal to power plant and oil.

    6. Off-take agreement:
    An agreement between the government and the concessionaire to purchase minimum
    quantity of services such as electricity, water at fixed price for fixed term.

    7. Operation and Maintenance Contract (O & M Contract):


    An agreement between the concession company and the operator. The operation
    phase plays a very important role in the success of BOT project as is success is tied to its revenue
    generating ability. The operation phase of build-operate-transfer projects presents the great
    management challenge and demands the highest level of attention.
    RISKS OF BOT CONTRACTS
    MERITS AND DEMERITS OF BOT
    MERITS
     It minimizes the public cost for infrastructure development.
     It reduces public debt.
     It allows for innovation.
     It provides a chance to bring in expertise.
     It allows each party to focus on therir strengths.
     It keeps puclic-sector funds where they are most needed.
     It is a process that is fully appraised.

    Demerits
     It can have higher transaction costs.
     It only works for large projects.
     It requires fund - raising to be successful.
     It may requires substantial operational revenues to be successful.
     It requires strong corporate governance.
     It can place the public sector at a disadvantage.
    Thank you

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