BUILD-OWN-OPERATE-TRANSFER (BOOT) FOR WATER-INFRASTRUCTURE PROJECTS

Abstract

Restructuring procurement processes is one way to enhance project delivery systems to service the needs of the community while providing value-for-money outcomes. Procurement options, however, require ongoing review of relative effectiveness in delivering (public-sector) infrastructure facilities. Public-private partnership (PPP) procurement adds to a list of schemes that can be utilized to bring infrastructure projects to fruition. The effectiveness of a PPP in comparison with traditional procurement is investigated here by case-study project examination of Western Australia’s first water-infrastructure project to be procured under a PPP scheme, using build-own-operate-transfer (BOOT) progression. Data was generated principally by designing/developing and conducting semi-structured interviews with the key stakeholders involved. The survey results show that the most significant factor in a decision to pursue a BOOT scheme, in comparison with traditional procurement, is the establishment of value-for-money (determined by a public-sector-comparator to provide a benchmark for evaluating private consortia bids). The work conducted here found that while BOOT schemes have extremely high bid costs that restrict tender participation, life-cycle considerations from a single consortium can offer cost advantages (through BOOT) in comparison to traditional procurement. Conversely however, the study found that if the procurement and delivery timeframes are factored in, traditional procurement is deemed more time efficient than PPP/BOOT. Indeed, currently mitigation of risk via bespoke contractual agreements for BOOT is (overly) complex and difficult to administer. Findings go towards part of the (public sector’s) procurement assessment suite of tools for the realization of future infrastructure assets.