What is Build Operate Transfer (BOT)? | Advantages and Disadvantages of BOT

BOT or build–own–operate–transfer (BOOT) is a project delivery method where a private entity (usually a corporation) obtains a concession from the public sector (or the private sector on rare occasions) to invest, design, construct, own, and operate a facility in which it will operate for a set period of time. This allows the project to recoup its investment, operating, and maintenance costs. BOT is usually applied in public–private partnerships. As a consequence of the long-term nature of the arrangement, the fees will typically increase during the concession period. The proponent’s internal rate of return for its investment is typically calculated in combination with both internal and external factors.

How to build, operate and transfer a project
Real estate development projects are complicated and time-consuming. From reviewing blueprints to getting the city’s approvals, it can take months or even years before a construction contract is signed and the first shovel hits dirt. And once construction has begun, maintaining a project over its lifetime can become challenging as well. How do you keep everything running smoothly after you’ve sold your penthouse or rented out your apartments? 
Build your property
Buildings are more than just structures — they’re also investments. With careful planning, you can use your own funds or a mortgage to finance the purchase of land and construction of a building. This can make it easier to buy a property that’s already approved by the city, and can also lower the risk of a project because you aren’t financing the entire cost of building the property. It’s important to realize that once you’ve bought the land and built the building, you’re only halfway there. Now you have to manage the property and make sure it continues to pay for itself.
Maintain your property
Now that your building is up and running, the next step is to maintain it. This means making sure that the building doesn’t fall apart, that the roof doesn’t leak and that the pipes aren’t bursting. As a property owner, you have the responsibility to make sure that the building is well maintained, and that includes hiring a property manager. A good property manager is a great investment — you can use that time to your advantage. When you’re not managing the building, you can focus on other aspects of your business.
Operate your property
Operating a property can be tricky. You have to ensure that the rent is high enough to cover the property’s costs, but not so high that it leaves you with too little profit. You also need to make sure that your tenants are decent people who pay their rent on time. If your tenants don’t keep their part of the bargain, you risk losing them and possibly facing eviction. You can use your experience as a landlord to learn how to operate other types of businesses. Starting a consulting or coaching business is a great way to learn and make money.
Transfer a property
By this point, you’ve had years of experience building and operating your property. You’ve raised money, applied for permits and dealt with contractors and tenants. Now it’s time to transfer the operation to someone else. To do this, you have to sell your business and transfer the ownership to the buyer. You’ll have to make sure that all the legal paperwork is in order and that all the city permits are still current. After that, you’re officially out of the property-management game.
Summing up
Real estate development projects can be challenging and time-consuming. From getting city approvals to building the structure, maintaining it and operating it, the process can take years. Once the project is in full swing, it’s important to remember that you’re only halfway there. You have to maintain the building and make sure that the rent is high enough to keep it operating. Once you’ve built the project, transferred ownership and operated it, you can take advantage of your experience by starting your own consulting or coaching business. If you’re interested in building or investing in real estate, these tips can help you get started.
Example of some of the BOT projects in India are:
1. Mumbai-Pune Expressway
2. Delhi-Noida Bridge
3. Vadodara-Halol Road
4. Bangalore-Mysore Expressway
5. Ahmedabad-Vadodara Expressway
Advantages of BOT:
1. Good quality roads are available.
2. Road is well maintained during the toll period.
3. Construction of roads is carried out rapidly.
4. Infrastructure development, economic growth of the country will increase.
5. Fast and comfortable movement is possible.
Disadvantages of BOT:
1. Road users have to pay toll tax for travel on BOT roads.
2. Petrol pumps and restaurants are situated at definite and limited locations.
3. Parking is restricted on expressways built on a BOT basis.
4. Private companies may not maintain the roads as per criteria in future.
5. Construction cost is higher.

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