Bot a Common Tyoe of Contract Between Government and Organiazation

Topics: Risk, Government, Project management Pages: 7 (1940 words) Published: June 28, 2013
Rami Alhomsi

{ B.O.T contract }

DR. Omar Amoudi

Damascus University

 Introduction:  Definition:
B.O.T { Build →Operate→ Transfer } , means that government give license to an investor from private sector to build -on his finance- an infrastructure project , and to operate it so all profits comeback to this investor , but for a limited period (about 10 -40) years , after this period the project possessor and profits transfer to the government .

 Theoretical background:


When/Why B.O.T is used?
when the government want , it can be … may the government go to this kind of contracts when it has necessary projects but no finance for it , so it contract with an investor to build it , because governments look and plan for a long period of time .



Advantages :
the benefit backs from using technical expertise and the knowledge of construction managements , many new technologic issues will transfer to the country , in addition of practice employees on modern techniques and developed sciences of managements , so it helps country to exist a base of practiced people . also it increase the productivity competence of the infrastructure projects when developed technology is used . and improve transfer services and all relationships with charging/emptying , also improve services of ports supply the needed finance to build which the government should fetch it . throw all construction risks for projects executers who have perfect qualifications specially in management skills and risk management .



Disadvantages :
-In spite of advantages which countries have from B.O.T , there are many disadvantages which should be studied before make a contract by this type -one of these disadvantages , when investors overestimate in evaluating the investment costs for the projects , and they may do that to require high prices from the users later of the projects , to have more profit -sometimes operating some projects may cause damages to the environment , especially if avoid that require increasing in finance specified for the project

in this case , governments should put special conditions on the investors to save the environment , and the contract must include these conditions which related to the finance of the project -some investors may use old equipments or technology what may not exist the required technical sides which are needed to fetch a new staff have the ability and qualifications to lead the new project and the new technology. also they may abstain their commitment trend employee and workers warranty ,healthful insurance. possibility to neglecting manufacturing the project when the period of concession is about to be finished.



What rights/commitments for the concessionaire in the predetermined period of the project: concessionaire has some rights in addition to some commitments. -Rights: invest the project at all the predetermined period of the concession and get the return profits of operation. sometimes monopolization this project , what means that any investor is prevented to do any competitive project , so this concession can be absolute . -the host government don't put any legislations which can constrain the concessionaire . Commitments: -building the project by the concurrent specifications -operate the project for predetermined period - commitment the conditions which are related to the security , safety -performance the conditions and commitments related to saving the environment which are in the contract. -transfer the project to the host government for free when the predetermined period is ended.



Settlement of disputes between the host government and the concessionaire : Settlement of disputes include mechanisms for settling disputes between the donor and the concessionaire through mediation, conciliation and arbitration in the sense that if a dispute between the parties regarding the implementation of the contract or the stages of implementation or the rights and...
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