DMPQ: Explain the following terms: a) The Built operate and transfer (BOT) Annuity Model b) BOT toll model c) Engineering, Procurement and Construction Model

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  1. The Build Operate and Transfer (BOT) Annuity Model

 

Under BOT annuity, a developer builds the highway, operates it for a specified duration and transfers it back to the government. The government starts payment to the developer after the launch of commercial operation of the project. Payment will be made on a six month basis.

 

  1. BOT Toll Model

 

In this toll based BOT model, a road developer constructs the road and he is allowed to recover his investment through toll collection. This toll collection will be over a period of nearly 30 years in most cases. There is no government payment to the developer as he earns his money invested from tolls.

 

  1. Engineering, Procurement and Construction (EPC) Model

 

Under this model, the cost is completely borne by the government. Government invites bids for engineering knowledge from the private players.  Procurement of raw material and construction costs are met by the government. The private sector’s participation is minimum and is limited to the provision of engineering expertise. A difficulty of the model is that financial is the high financial burden for the government

 

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