Abstract

By Fiona Chandra I and Luh-Maan Chang 2 Build Operate Transfer (BOT) Projects are one of the most advanced and emerging project delivery systems affecting the world's construction industry today. Generally, Build Operate Transfer represents a privatized effort to infrastructure development, whereupon a consortium undertakes a concession to finance, construct, operate and maintain the desired project, in exchange for revenues received from the operation of the project. There are many risks involved inherent to Build Operate Transfer projects that must be investigated. This paper examines the degree of impact of 3foreign currency fluctuations on Build Operate Transfer projects' cash flows through a sensitivity analysis. In addition to determining the impact of devaluation or strengthening through the case study approach, possible financial methods are suggested to mitigate financial risks.

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