JOT BOT ROT

I. Joint Operation

Joint Operation is an association of two or more business entities joining to complete a project. The merger is temporary until the project is completed.

II. Built, Operate and Transfer (BOT)

Under a build-operate-transfer (BOT) contract, an entity – usually a government – grants a concession to a private company to finance, build and operate a project. The company operates the project for a period of time – perhaps 20 or 30 years – with the goal of recouping its investment, then transfers control of the project to the government. BOT projects are normally large-scale, greenfield infrastructure projects that would otherwise be financed, built and operated solely by the government. Examples include a highway in Pakistan, a wastewater treatment facility in China and a power plant in the Philippines. In general, BOT contractors are special-purpose companies formed specifically for a given project. During the project period – when the contractor is operating the project it has built – revenues usually come from a single source, an offtake purchaser. This may be a government or state-owned enterprise. Power Purchase Agreements, in which a government utility acts as offtaker and purchases electricity from a privately owned plant, are an example of this arrangement. Under a traditional concession, the company would sell to directly to consumers without a government intermediary. BOT agreements often stipulate minimum prices the offtaker must pay.

III. Rehabilitate, Operate and Transfer (ROT)

The ROT is a PPP (Public Private Partnership) model for infrastructure sector. Under this approach, the governments/local bodies allow private promoters to rehabilitate and operate a facility during a concession period. After the concession period, the project is transferred back to governments/local bodies Rehabilitate, Opearate and Transfer (ROT) is a contractual arrangement whereby an existing facility is turned over to the private sector to refurbish, operate and maintain for a franchise period, at the expiry of which the legal title to the facility is returned to the government.

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