BUILD OPERATE TRANSFER (BOT) PORJECTS DECISION, RISK, AND SUCCESS FACTORS - PowerPoint PPT Presentation

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BUILD OPERATE TRANSFER (BOT) PORJECTS DECISION, RISK, AND SUCCESS FACTORS. Presented by: Alaa Albesher. Outline:. Introduction. Decision Factors. Risk Factors. Critical Success Factors. Conclusion. Introduction:. BOT. BOT types. Different variations depending on occasions or countries.

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BUILD OPERATE TRANSFER (BOT) PORJECTS DECISION, RISK, AND SUCCESS FACTORS

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Build operate transfer bot porjects decision risk and success factors

BUILD OPERATE TRANSFER (BOT) PORJECTS DECISION, RISK, AND SUCCESS FACTORS

Presented by: Alaa Albesher


Outline

Outline:

  • Introduction.

  • Decision Factors.

  • Risk Factors.

  • Critical Success Factors.

  • Conclusion.


Introduction

Introduction:

  • BOT.

  • BOT types.

    • Different variations depending on occasions or countries.

  • BOT need.

    • BOT is especially popular in developing countries.

  • BOT advantages.


Decision factors

Decision Factors:

  • Decision under uncertainty.

  • Decision sequence.

  • Multiple alternatives.

  • Multiple interests.


Risk factors

Risk Factors:

  • Political risk.

  • Financial risk.

  • Operation risk.

  • Construction risk.

  • Market risk.


1 political risk

1. Political Risk:

  • The source is the potential of political events to occur such as war or revolution.

  • This risk is more significant in developing countries.


2 financial risk

2. Financial Risk:

  • The source is the oscillations in exchange rates between currencies, interest rate, and inflation.

  • This risk is more significant in developing countries.


3 operation risk

3. Operation Risk:

  • The source of this risk is the probability of actual operation and maintenance costs to exceed planned costs.


4 construction risk

4. Construction Risk:

  • The risk is related to the delays of project completion and cost overruns.

  • Delays causes are technical problems, poor management, or both combined together.

  • Operation and Construction risks are more manageable.


5 market risk

5. Market Risk:

  • Demand risk from doubts of demand regarding the project products.

  • Price risk related to the probability of price change for the project products.


Critical success factors

Critical Success Factors:

  • Entrepreneurship and leadership.

  • Right project identification.

  • Strength of the consortium.

  • Technical solution advantage.

  • Financial package differentiation.

  • Differentiation in guarantees.


1 entrepreneurship and leadership

1. Entrepreneurship and Leadership:

  • Defined as the pursuit of opportunities beyond the financial and technical resources that the entrepreneur currently possesses.

  • There are three sub factors:

    • Risk taker.

    • Cultivating goodwill with host government.

    • Leadership of a key entrepreneur.


2 right project identification

2. Right Project Identification:

  • Choosing the right project to pursue is very essential factor for successful BOT project.

  • This factor include accurate prediction of need and lack of funds by host government.


3 strength of the consortium

3. Strength of the Consortium:

  • The consortium must be strong to win the BOT project contract by having financial strength and multinational team.


4 technical solution advantage

4. Technical Solution Advantage:

  • Having technical solutions that provide cost reduction will generate a competitive advantage and attractive proposal.

  • Other ways of having solution advantage could be by shorter construction period, good environmental impact, and public safety.


5 financial package differentiation

5. Financial Package Differentiation:

  • Financial package will provide cost advantage and make the proposal unique.

  • Cost advantage requires low construction cost, acceptable tariff levels, reasonable equity to dept ratio, and short concession period.


6 differentiation in guarantees

6. Differentiation in Guarantees:

  • Special features or guarantees differentiate a proposal from others.

  • Special features should demonstrate the humanity of the project and ensure fears the host government might have.

  • Less guarantees requirements are preferable by governments.


Conclusion

Conclusion:

  • A viable mechanism for infrastructure was needed resulted in BOT.

  • There are many factors affect the decision making of taking a BOT project or not.

  • Risks involved in BOT projects must be considered and assessed.

  • Six critical success factors are common in success BOT projects.


Thank you for listening

Thank you for listening

Any Questions!


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