The need for new and revitalized transportation infrastructure on a global basis is substantial and growing. The capital required is enormous, and far beyond the borrowing capacities of governments, which are severely curtailed by their current debt positions. One approach to developing such facilities is to adopt a user-pay one, which, while being pursued more and more frequently by all levels of government, poses major political risks. However, given that such an approach is acceptable, the next step is to procure the project using a public-private partnership (PPP) arrangement, such as Build-Operate-Transfer (BOT). This paper examines some of the potential risks and returns associated with a BOT with a BOT approach, which constitutes one of serveral options on the spectrum of PPP arrangements. In doing so, the researchers outline an analysis framework designed to address several of the decisions which confront both the public and the private sectors when assessing the suitability of a project for a PPP approach. (A)
Abstract