May 30, 2019
Build-Operate-Transfer, on a technical sense, is a type of concession arrangement wherein Entity A delegates the right to build and to operate a particular project to Entity B within a certain period. This timeframe allows Entity B to recuperate their investment and get profits while Entity A gets a more established business after the turnover.
The BOT setup is typical for government projects such as infrastructures. A common example would be the construction of expressways where the government gives the right to build and to operate the expressway in favor of a private business. In return, the private entity shall finance the project and enjoy the revenues they can derive within the contract frame. After the given period, the private entity shall be obliged to transfer the ownership back to the government.
A Build-Operate-Transfer arrangement enables entities with limited capital and financing to implement their projects with the help of another entity who is willing to start the project. This type of outsourcing gives way to a broader range of resources and talent, which could contribute to a better and well-thought-out project. Outsource Accelerator can help setup your BOT arrangement with the outsourcing supplier to ensure that best terms and prices are provided for your business.