Faced with major infrastructure needs, governments in both developed and third world nations have resorted to build operate transfer (BOT) techniques. The BOT concept is actually quite simple. It involves the utilization of private sector resources for public benefit. Most BOT contracts involve some public utility or transport facility. Typically, development contracts are granted to private consortia comprised of contractors, financiers, and various advisors. These professionals finance, design, and build the public project. Upon completion, the consortium is then allowed to operate the concession for a set period of time. At the end of this concession period, control of the facility is transfered back to the government. While this model may be remarkably simple, real life BOT projects can actually become quite complex. The different problems which may arise can range from high up front costs, to various types of risk. In the United States, BOT methods have been employed for the construction of power plants. Although transport systems offer a less ideal context for BOT, recent legislation (e.g., California's AB680) may make the techniques more popular. Already, BOT methods are being applied extensively throughout the world. Although individual projects may vary considerably, certain features are common to all. Indeed, BOT methods have been proven effective. They are an effective tool for the management of technology.
Build operate transfer techniques are not a new phenomenon. According to Stephen Syrett, director at Morgan Grenfell, "The railways that built the British empire were financed on BOT" (Barrett, 1987, p. 124). More recently, the concept has been reintroduced in Turkey as part of its privatization program. In 1984, Turkish Prime Minister Turgut Ozal resorted to BOT as a means for raising off balance sheet financing for infrastructure and industrial project development. Almost immediately thereafter, ...