Nautical Term: Build-operate-transfer (BOT)
Definition of Build-operate-transfer (BOT)
Build-operate-transfer (BOT) is a type of public-private partnership where a private party or consortium takes on the responsibility of financing, constructing, operating, and maintaining a facility for a specified period. At the end of the concession term, the facility is transferred to the concerned government or port authority. During the entire concession period, the government or port authority retains ownership of the concession area. The commercial risk of operating the facility lies with the concessionaire.
For example, a port authority may enter into a BOT agreement with a private consortium to construct and operate a new container terminal at the port for a period of 25 years. The private consortium finances, constructs, operates, and maintains the container terminal during the concession period. At the end of the concession period, the container terminal is transferred back to the port authority. During the entire concession period, the port authority retains ownership of the land on which the container terminal is built. The private consortium bears the commercial risk of operating the container terminal.
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