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→Build Own Operate and Transfer (BOOT)
== Build Own Operate and Transfer (BOOT)==
Build-Operate-Transfer (BOT) <ref> in some countries, such as Canada, Australia and New Zealand, the term used is Build-Own-Operate-Transfer (BOOT) <ref/> is a form of project financing, wherein a private entity receives a concession from the private or public sector to finance, design, construct, and operate a facility for a specified period, often as long as 20 or 30 years. After the concession period ends, ownership is transferred back to the granting entity.
During the concession the project proponent is allowed to charge the users of the facility appropriate tolls, fees, rentals, and charges stated in the concession contract. This enables the project proponent to recover its investment, operating and maintenance expenses in the project.
Due to the long-term nature of the arrangement, the fees are usually raised during the concession period. The rate of increase is often tied to a combination of internal and external variables, allowing the proponent to reach a satisfactory internal rate of return for its investment.
Traditionally, such projects provide for the infrastructure to be transferred to the government at the end of the concession period. (in Australia, primarily for reasons related to the borrowing powers of states, the transfer obligation is omitted).
