Under the Build-Operate-Transfer (BOT) model, the government turns over development and initial operation of what typically would be a public-sector project to the private sector. The private sector contractor or consortium of contractors finances the project, accomplishes the construction, and operates the new facility for some specified length of time after which it is expected to transfer ownership to the government, usually at no cost. The eventual transfer to the government occurs so it ultimately can retain control of the public service.
The BOT approach is often appealing to a host government because it allows that government the following options:
• The ability to minimize its capital costs while still implementing a project at a time when it would not be able to provide the requisite funds, and/or might seek to use its funds for other projects;
• The opportunity to take advantage of operational efficiencies regularly associated with private sector participation; and
• The chance to encourage outside investment and introduce new or improved technology.
This technique works as well for rehabilitation or expansion of an existing facility, when it is sometimes call Rehabilitate-Operate-Transfer (ROT).