Build-operate-transfer Research Articles

Risk Identification of Public Private Partnership Contracts with The Build-Operate-Transfer Scheme on Toll Road in Indonesia

One of the most crucial things that every nation needs is infrastructure. To boost the nation’s competitiveness, the Indonesian government is expediting infrastructure construction. Howeve, there are risk and big financial outlays that need to be addressed. A collaboration agreement, often known as public-private partnership (PPP), between the government and the private party is required in order to do this. With this contract, the government will be able to increase the number of toll roads throughout Indonesia. Although PPP comes in a variety of forms, the Build Operate Transfer (BOT) model is the most commonly used. The organizers and managers of the toll road will assume the government may be able to increase the number of toll roads Indonesia requires with the help of this deal. Although PPP comes in a variety of forms, the BOT model is the most commonly used. The organizers and managers of the toll road will assume all risks associated with the partnership plan. In order to reduce the risks caused by a partnership, each risk must be identified, assigned, and given the proper reaction. The data used in this study comes from BOT cooperation scheme-using toll road projects. The study indicates that there are relevant risks for toll road projects in Indonesia using PPP contracts with the BOT scheme, (1) political risk, (2) feasibility study risk, (3) financial risk, (4) design risk, (5) construction risk, (6) operation risk, and (7) transfer risk. The risk allocation in this research is based on expert opinions, adapted from ongoing toll road BOT projects in Indonesia.

Perceptions of Public and Private Sector Stakeholders on the Benefits and Challenges of Public-Private-Partnerships in Nigeria

Nigeria’s infrastructure deficit has become acute because of the country’s burgeoning population. The Public-Private Partnership (PPP) model, under labels such as Private-Finance Initiative (PFI) and Build Operate-Transfer (BOT), has been touted as the solution to the funding and other challenges confronting the country with regard to infrastructure development. This research sought to examine stakeholder experiences and perceptions on the benefits, abuse and challenges of deploying PPP for infrastructure procurement. The stakeholders investigated were in Lagos and Ogun States of Nigeria, although some of the experiences transcended the two states. Copies of the questionnaire were purposively administered to 115 professionals drawn from the built environment as well as from the legal and financial sectors of the Nigerian economy; the professionals were from the private and public sectors. Eighty-six (86) copies of the questionnaire were returned, with the data subjected to descriptive and inferential statistical analyses. Ranking highest among the list of thirteen identified challenges investigated was ‘political interference outside the agreed rules of running the PPP framework’, while ‘inability to initiate or package PPP projects’ ranked least. The most significant form of abuse or disadvantage was ‘embezzling of public funds and reinvesting in PPP as private sector investor’, while the least significant form of abuse was determination of the concession period. The inferential statistical analyses found no significant difference between both sectors in the assessment factors except in the matter of ‘more careful approach in investing funds in infrastructure’. It is therefore recommended that there should be a continuous audit of stakeholder perceptions on various PPP issues that can form the baseline for impactful improvement and intervention in PPP projects.

Juridical Analysis of Build Operate Transfer Agreements at the Mataram Mall Building

The purpose of this research is to identify and analyze the regulation of Build Operate Transfer (BOT) agreements in positive law in Indonesia and the legal issues in the BOT agreement between the Mataram City Government and PT Pacifik Cilinaya Fantacy. The research method used is normative legal research with a legislative approach and a conceptual approach. The types of data used include secondary and primary data. Secondary data consists of literature sourced from primary, secondary, and tertiary legal materials. The regulation of Build Operate Transfer is essentially the same as general contract regulations, which are governed by the third book of the Civil Code regarding obligations. Additionally, Build Operate Transfer is also regulated by several other regulations, including: Government Regulation No. 27 of 2014, Presidential Regulation No. 13 of 2010, Minister of Finance Regulation No. 78/PMK.06/2014, and Minister of Finance Regulation No. 02/PMK.06/2008 concerning the Appraisal of State-Owned Assets. The legal issue in this Build Operate Transfer agreement is that PT Pacifik Cilinaya Fantacy failed to comply with and PT Pacifik Cilinaya Fantacy regarding the management of the APHM Cilinaya Area. PT Pacifik Cilinaya Fantacy did not fulfill its obligation to pay royalties to the Mataram City Government from 2016 to 2019.

Public-Private partnership frameworks for financing affordable housing: Lessons and models

The pressing need for affordable housing in both developed and developing countries has prompted governments to explore innovative financing mechanisms, with Public-Private Partnerships (PPPs) emerging as a viable solution. This paper examines the frameworks, lessons, and models of PPPs for financing affordable housing, aiming to provide insights into their effectiveness and scalability. PPPs combine the resources, expertise, and efficiencies of both the public and private sectors to address the housing affordability crisis. By leveraging the strengths of each sector, PPPs aim to reduce financial burdens on governments while ensuring the delivery of quality housing solutions. This review outlines the various PPP models, including build-operate-transfer (BOT), design-build-finance-operate (DBFO), and lease-develop-operate (LDO), highlighting their structural differences and application contexts. Key components of successful PPP frameworks include clear regulatory environments, transparent procurement processes, risk-sharing mechanisms, and robust stakeholder engagement. Regulatory frameworks that support PPPs play a critical role in providing legal certainty and fostering investor confidence. Transparent procurement processes ensure fairness and competitiveness, while effective risk-sharing mechanisms distribute financial, construction, and operational risks appropriately between public and private partners. Engaging stakeholders, including communities and civil society, is essential for aligning project objectives with local needs and ensuring social acceptance. Case studies from various regions illustrate the practical application and outcomes of PPP frameworks. In the United Kingdom, the Affordable Homes Programme (AHP) has effectively utilized PPPs to deliver thousands of affordable housing units, demonstrating the benefits of strong regulatory support and private sector participation. Singapore's Housing and Development Board (HDB) employs PPP models to maintain high housing standards while ensuring affordability through extensive government subsidies and private sector involvement. In South Africa, the Social Housing Regulatory Authority (SHRA) leverages PPPs to develop rental housing for low- and moderate-income households, highlighting the importance of government incentives and capacity-building initiatives. The review concludes that PPP frameworks, when effectively designed and implemented, can significantly enhance the availability of affordable housing. Lessons learned from successful models emphasize the need for supportive policies, transparent processes, and inclusive stakeholder engagement. Policymakers and practitioners can draw on these insights to develop tailored PPP approaches that address specific housing challenges and contribute to sustainable urban development. Keywords: Public-Private Partnership: Frameworks, Financing, Affordable Housing, Models.

Self-help and spontaneous heroism in urban service delivery in Ghana’s informal neighbourhoods: a case study of Moshie Zongo

ABSTRACT The delivery of urban services and facilities is the primary responsibility of both local and central governments to facilitate the day-to-day activities of urban dwellers. However, the financial incapacity, coupled with general institutional constraints, hinders the efficient and adequate provision of all relevant infrastructure facilities needed by urban dwellers, particularly, in informal neighbourhoods. In response, self-help initiatives and spontaneous activities of some actors have emerged to bridge the gap and at best, complement the government’s development efforts. Utilising a mixed-method approach, the study relied on both quantitative and qualitative data from 374 randomly selected households as well as key informants from relevant institutions to explore the dynamism of self-help initiatives. The study specifically relies on the delivery of waste management and water supply services to evaluate and understand self-help initiatives in Moshie Zongo, an informal community in Kumasi City. From the analysis, the tricycle waste collectors (Aboboya) through the self-help initiative collect about 80%−90% of the solid waste generated in the area which is also preferred by about 80% of the community dwellers. Moreover, about 60% of the sources of water are owned by private individuals. Again, the Wastes Department of KMA, through Build Operate and Transfer (BOT) and Renovate, Operate, and Transfer (ROT) has helped to provide and renovate new and existing toilet facilities to ensure the provision and management of liquid waste in informal settlements. The study proposes effective and efficient monitoring, coordination, and regulation to enhance this initiative in the delivery of urban infrastructure and services.

THE ROLE OF BOOT CONTRACTS IN ACHIEVING ECONOMIC DEVELOPMENT – THE CASE OF ALGERIA

The BOOT (Build-Own-Operate-Transfer) contract is considered one of the innovative mechanisms for managing public facilities due to its importance in implementing investment projects, particularly in construction, operation, and property transfer. Its significance emerged at the beginning of the twentieth century and was further reinforced after the Second World War, amidst the presence of war-stricken economies. Additionally, there was an ideological shift in the role of the state from being a guardian state to an intervening state, which led to the emergence of public law in business affairs. The BOOT contract became one of its cornerstones as countries resorted to international economic contracts. Despite Algeria’s adoption of the BOOT contract as one of the forms of international contracts due to its importance in attracting foreign direct investment and technology transfer, this did not prompt Algerian lawmakers to establish a specific legal framework for it. This is despite the modifications that have affected the specific system, notably Presidential Decree No. 15-247, which is considered one form of concession contracts.

Appraising critical success factors in sustainable housing projects: A comparative study of PPP modalities in Saudi Arabia

This study examines the critical success factors (CSFs) crucial for the effective deployment of public-private partnership (PPP) models in sustainable housing projects in the Kingdom of Saudi Arabia (KSA), underpinning the nation's Vision 2030. Through a robust methodology that incorporates a profound literature review, structured interviews, and a survey involving key stakeholders, the study prioritizes fourteen significant CSFs integral to PPP efficacy. Employing Analytical Hierarchy Process analysis, key outcomes underscore the paramount importance of technical aspects with an emphasis on sustainability, tailoring risk-sharing and allocation to encompass green technologies and eco-friendly practices, and economic stability in the light of long-term environmental sustainability in fostering successful sustainable housing projects. Notably, the Build-Operate-Transfer (BOT) model is categorized as the most effective PPP modality, attaining a mean importance score of 4.07. This model is contrasted with other modalities such as Design-Build-Operate (DBO) and Build-Own-Lease-Transfer (BOLT), which scored lower in effectiveness. This comprehensive evaluation provides crucial insights for policymakers and practitioners, emphasizing the strategic selection of PPP modalities and the prioritization of CSFs to enhance the sustainability and effectiveness of housing projects in KSA.

Research on Public-Private Partnership (PPP) Investment under Build - Operate - Transfer (BOT) and Build-Lease-Transfer (BLT) Contract Types in the High-Speed North-South Rail Project (HSR), the Hanoi - Vinh Line

Introduction The North-South high-speed rail development is a completely new field in Vietnam. Calculations show that Vietnam's high-speed rail system will attract a significant amount of investment, which is 4-5 times higher than developing highways, and the annual operation and maintenance costs are three times higher. Methods Public-Private Partnership (PPP) investment is effective and required to ease the strain on the state budget. This research aims to build a database for calculating the financial efficiency of the high-speed rail project (Hanoi -Vinh line), thereby establishing a mechanism for sharing benefits and risks between the state and investors through financial scenarios: applying Build - Operate - Transfer (BOT) contracts with state participation rates of 50% and 80%, respectively. Results The qualitative research method is used to determine the indicators influencing the project's benefits and costs, assume and adjust economic, financial, and fare parameters based on Vietnam's actual conditions, and investigate and survey the affected areas to assess passenger transport demand. Conclusion Furthermore, the financial efficiency of the project is calculated, and various participation options for the parties involved are proposed to attract investors.

Green Tollways: Strategizing Carbon-Emissions-Based Government-Owned Public Toll Road Operations in China

When build–operate–transfer (BOT) roads are transferred back to the government upon the expiry of their contract, they are typically considered to be public roads and are no longer subject to tolls. However, in China, BOT roads, after being transferred to the government, remain tolled by the government in order to maintain efficiency. Therefore, such roads are termed public toll roads (PTRs). During the operational phase of PTRs, ongoing operating costs become a significant financial burden compared to the initial investment made for their construction. Against the backdrop of global carbon emission efforts, this paper studies the operational strategy of PTRs in terms of car emission costs, which constitute a portion of PTRs’ operation costs. This paper explores the operational strategy of PTRs, including whether the government should operate the road independently or outsource their operation to a competent private firm. Our analysis concludes that the operator should manage PTRs for the entire duration of their operation by maintaining self-financing while also accounting for operation costs. In this study, governmental regulations for the cost of carbon emissions are also studied.

Investment Project Analysis Of Extra Facility Business Model Case Study: PT. PLN (Persero) Riau And Riau Islands Distribution Units

The development of disruptive business and technology has the potential to reduce the growth of electricity sales. The existence of "Indirect competitors" who also take advantage of the use of assets that do business in the electric vehicle ecosystem, companies providing solar PV rooftop services, and the emergence of new business areas will be a challenge for PLN. Companies must develop a business model strategy to ensure the company's financial sustainability, which ultimately ensures the sustainability of the electricity business in the future. Real improvements are expected to help companies increase revenue, efficiency, and cost effectiveness which can ultimately contribute to company revenue. Through the Extra Facilities business model, as a form of service to meet changing market tastes, sales strategies need to be implemented for customers who have special standards and needs. In this regard, the author carried out an analysis of the investment for connecting Extra Facility services to one of the prospective PLN customers of the Riau and Riau Islands Distribution Main Unit using a build-operate-transfer (BOT) scheme. The feasible indicator that was being used was financial profitability, resulting in IDR. 6,914,249,547 NPV higher than zero. Moreover, this project also gives certain commitment by generating 17.56% IRR > WACC with a payback period of 4 years 8 months less than 10 years (based on the term of the agreement).

ANALYSIS OF ELECTION OF INFRASTRUCTURE FINANCING SCHEMES IN THE DEVELOPMENT OF REGIONAL WASTE MANAGEMENT IN THE DISTRICT AND CITY OF PROBOLINGGO

Regional waste management is a crucial aspect in ensuring environmental sustainability and public health in the Probolinggo Regency and City. One of the main challenges in the development of regional waste management is the financing of the necessary infrastructure to achieve these goals. This research aims to analyze the selection of infrastructure financing schemes in the development of regional waste management in the Probolinggo Regency and City. The research methodology involves field surveys, interviews with relevant stakeholders, and economic and financial data analysis. The investment analysis method used includes calculations of Net Present Value (NPV), Internal Rate of Return (IRR), and Benefit Cost Ratio (BCR), considering Availability Payment financing. Additionally, this study will also analyze Life Cycle Cost (LCC) while considering various financing schemes, including government financing schemes (APBN/APBD) and non-government financing schemes such as Public-Private Partnership (PPP) schemes like Build-Operate-Transfer (BOT) and Regional Loans. The results of the analysis show that all financing schemes, both government and non-government, yield viable results. These three schemes are then validated through Focus Group Discussions (FGD) using financial and non-financial criteria. The selected financing scheme is the regional loan, with the second alternative being APBN & APBD. Meanwhile, the BOT Public-Private Partnership scheme is considered as the last alternative financing scheme.

Analisis Yuridis Akta Perdamaian Perjanjian Kerjasama Penglolaan Barang Milik Negara (Perjanjian Antara Pusat Koperasi TNI Angkatan Darat Dengan PT Luwiwan Megah Perkasa)

The focus of this research is a case that happened between Koperasi TNI Angkatan Darat (Indonesian Army Cooperative) and PT Luwiwan Megah Perkara in connection with the management of Sriwijaya Sports Centre which fall under the category of state-owned assets. The assets stand on a state-owned land with management rights in the form of Right to Use Certificate on the name of Ministry of Defense of the Republic of Indonesia. The management of the asset was in the form of Build Operate Transfer (BOT) agreement. The Koperasi TNI Angkatan Darat (Indonesian Army Cooperative) itself is an independent legal entity and not structurally under the auspice of the Indonesian army. The main problems on this research are: 1) the legal standing of Koperasi TNI Angkatan Darat (Indonesian Army Cooperative) in entering into a management agreement of state-owned assets; and 2) Legal analysis of the claim submitted by PT Luwiwan Megah Perkasa against Koperasi TNI Angkatan Darat (Indonesian Army Cooperative). This research is normative legal research, with the nature of descriptive analysis research. The approach used is the statutory approach. The theory of agreement, theory of authority, and legal protection theory are used to analyze the main problems in this research

K-Means Clustering to Identity Twitter Build Operate Transfer (BOT) on Influential Accounts

Twitter is a popular social media with hundreds of millions of users, but some are not human. About 48 million accounts are created by Build Operate Transfer (BOT), which represents up to 15% of all accounts. BOTs are created for various purposes, one of which is to post information about news automatically. However, BOTs have also been abused, such as spreading hoaxes or influencing public perception of a topic. The research aimed to determine which Twitter accounts were identified as BOT accounts based on predefined attributes. The research used tweet data from 213 Twitter accounts. The accounts used as test data were accounts that had influence. After that, the data were clustered using k-means using the attributes of retweets + replies count, followers count, account age, friends count, status count, digits count in name, username length, name similarity, name ratio, and likes count. The results show the optimal number of clustering at k = 3 on the Sum of Squared Errors (SSE) evaluation and the Elbow method and the best quality and cluster power at k = 2 on the silhouette coefficient. It shows that the clustered accounts with the highest number of members on each attribute are places for accounts with high BOT scores from several aspects of the BOT score type.

Analysis of Investment Feasibility for the Wonderlife Hotel Development Project in Pangandaran Based on Financial Aspect

The increasing tourism activities in Pangandaran Tourist Destination must be supported by adequate facilities and infrastructure, particularly accommodation. Pondok Seni Pangandaran, owned by the Department of Culture and Tourism of West Java Province, needs to be revitalized to compete with other hotels. Through the Build Operate Transfer (BOT) cooperation scheme, private sector involvement is expected in investing in the revitalization of Pondok Seni Pangandaran. However, a feasibility study is required to determine the financial viability of the investment, including calculations of NPV, Profitability Index, Payback Period, and IRR. From the feasibility analysis, the investment shows a cash inflow of Rp. 555,712,698,655.00; projected profit and loss of Rp. 45,026,582,596.00 over a 30-year operating period; NPV of IDR 17,962,228,160.00; Profitability Index of 2.53; Payback Period of 10 years from the construction period and 8 years from the operational period; and IRR of 13.17%. In conclusion, the investment in the Wonderlife Hotel development project in Pangandaran is deemed feasible.

ANALISIS YURIDIS AKIBAT HUKUM TIMBULNYA PEMUTUSAN KONTRAK SECARA SEPIHAK TERHADAP INVESTOR PADA PERJANJIAN BOT (BUILD OPERATE TRANSFER)

. The contract in a Build-to-Transfer agreement that is starting to develop is known as a BOT Agreement or Build Operate Transfer, referring to a project transfer method that is often used in large infrastructure projects. Is a private legal entity that obtains a business license from the government or public sector to finance, design and build, implement and own a project within a certain period of time. The aim is for the private sector to get back the results of its investment and then transfer project management to the government or public sector. However, if in the process there is a unilateral termination of the contract, the party being terminated will have legal consequences that will cause loss or suffering for him. So my writing analyzes the legal consequences that arise from conflicts or implications in cases of unilateral contract termination by the government or the public sector so that investors' rights are maintained and are not harmed.

The Importance of Environmental, Social, and Governance (ESG) Principles in Public Works and Housing Infrastructure

In 2020-2024 period, it is estimated that the total investment needed to achieve infrastructure development targets in the public works and housing sector is approximately IDR 2,058 trillion. Meanwhile, the state budget can only cover around 30% of that amount, leaving the rest to be dependent on creative financing schemes such as Public-Private Partnerships (PPP). On the other hand, the public works and housing sector is a major contributor to greenhouse gas emission production. It means that infrastructure projects especially in the PWH sectors need to be safeguarded in terms of Sustainable Development Goals (SDGs) and climate change adaptation. In the recent development, there is a significant rise in changing priorities of investors in supporting investment, which is to incorporate Environmental, Social, and Governance (ESG) principles. To foster ESG in infrastructure financing, the Ministry of Finance (MoF) Republic of Indonesia has launched ESG Framework and Manual to be applied by the Government Contracting Agency (GCA) as well as Special Mission Vehicles (SMVs) under MoF in undertaking the PPP project which receives government support and facilities. The Ministry of Public Works and Housing is currently preparing numerous PPP projects to achieve the funding gap, one of which is the Maintenance of Bintang Bano Dam and Build Operate, Transfer (BOT) of Mini Hydro Power Plant. As the first unsolicited PPP Project in the water resources sector, the project can be embedded with ESG principles. However, since ESG had not been incorporated since the preparation, the corrective action plan toward required Environment and Social aspects are needed to be applied. Keywords: Public-Private Partnership, greenhouse gas, ESG, Bintang Bano Project, corrective action plan

The Mechanism and Countermeasures of the Impact of State Subsidy Backslide on the Efficiency of Waste-to-Energy Enterprises—A Case Study in China

The scientific investment decision model of waste incineration power generation is helpful in providing a scientific basis for the government and environmental protection enterprises to formulate reasonable waste prices. The waste incineration power generation project revenue and cost composition framework, based on the project net present value of factors affecting causality analysis, the construction of a waste incineration power generation PPP project net present value system dynamics model, and the use of Vensim PLE software, version 7.3.5, combined with the garbage power generation of listed companies, was built, and we put into use the enterprise’s financial data and the author’s research of the case of the BOT (Build–Operate–Transfer) project data to examine the validity of the model test, simulation, and sensitivity analysis. The results show that the regression of a national subsidy does not necessarily lead to a price adjustment of the waste disposal fee, and when a change in tariff subsidy occurs, the loss brought by the reduction in a feed-in tariff can be compensated by increasing the income from carbon sinks, decreasing the intensity of investment through technological advancement, improving the coefficient of waste power generation through garbage classification, and increasing the utilization of production capacity through the treatment of multiple wastes in a single or a combination of ways.

Importance of PPP in water supply sector in developing countries: The case of Georgia

This article presents an empirical study on the effectiveness of Public-Private Partnerships (PPPs) in the water supply industry in Georgia. The study identifies vital and causal problems within the industry, including outdated infrastructure, lack of technical and financial resources in rural areas, absence of consolidated state policy, and insufficient state subsidies. Through a comprehensive assessment that considers economic, social, and environmental sustainability, as well as stakeholder perspectives, the study evaluates the relative importance of different PPP models. Findings indicate that the Build-Operate-Transfer (BOT) model is highly prioritized due to its reliance on private capital and the preservation of state control. The results contribute to evidence-based decision-making, enabling policymakers to design effective PPP frameworks that address the specific needs and characteristics of the water supply industry in Georgia.

Factors influencing investment attraction in road infrastructure BOT projects: A comprehensive analysis in the southern key economic zone of Vietnam

Over the course of the last two decades, Vietnam has demonstrated a growing interest in public-private partnership (PPP) investments within the domain of road transport infrastructure. However, the overall success rate of these endeavors has remained constrained and, in fact, has displayed a propensity for decline. Understanding the primary determinants behind this phenomenon, particularly the internal factors within the management system, has been a perplexing and protracted process, hindering the development of viable solutions. This research employs a qualitative analysis approach, leveraging in-depth interviews conducted with 250 road traffic infrastructure PPP project managers and experts. The objective is to discern the factors that exert influence over the investment attractiveness of build-operate-transfer (BOT) projects in the vital Southern Key Economic Zone of Vietnam. Subsequently, utilizing the collated data, this study employs a quantitative methodology to measure the impact of these factors via a derived multivariate regression equation. The findings reveal the existence of five distinct groups of factors that affect the investment attractiveness of BOT projects in the Southern Key Economic Zone, classified by their respective levels of influence. These groups encompass factors relating to the role of the state, the legal framework, human resources engagement in PPP ventures, supportive financial instruments, and the allocation of risk. Notably, these outcomes align with previous research efforts, further substantiating the robustness and reliability of the findings presented within this study.

Development of a Financing Optimization Framework Based on Risk Simulation in BOT Projects: A Case Study of the Waste-to-Energy Project

Infrastructure projects that are mostly characterized by high uncertainty usually face various risks at all stages as timing risks, cost risks, and disruption in the executive processes (by the reason of unpredictable obstacles in financing risks, technology production, and so on). Owing to the complex nature of infrastructure projects, the build-operate-transfer (BOT) contract is usually concluded between the private and public sectors. Considering that the public sector transfers all or part of its financial risk to the private sector (contractors), in this type of contract, the distribution of risks is different from that of traditional contracts. Besides, project implementation methods and the lack of risk management might lead to the failure of the project. As the implementation of such projects, along with the risks of the projects that require a large amount of investment, it would be necessary to develop a proper financing schedule with consideration of the effect of repayment of various loans in the project to ensure the feasibility of the project. So, in this project, considering the effects of risks in a waste-to-energy infrastructure project, an optimal project financing framework is developed. In the current research, using Monte Carlo simulation, the impact of risks on the project is investigated during the construction period and the operation period. The results have shown that consideration of the impact of the risks on projects might have a significant effect on the increase of time and cost; nevertheless, the cost of optimal financing might reduce the project profit by 23%. The results indicate that choosing the appropriate financing solution guarantees the project’s final profit. Besides, it can help project managers to make the best financing decisions based on realistic situations.