Build, own, operate and transfer (BOOT)
A build, own, operate and transfer (BOOT) contract is a project delivery model that can be used for large projects developed through Public Private Partnerships (PPPs). The term 'Public Private Partnerships' refers to a very broad range of partnerships in which the public and private sectors collaborate for some mutual benefit.
Under a BOOT contract, a private organisation undertakes to complete a large project, such as a complex infrastructure project, which they are granted a concession to finance and build by a public sector partner, typically a government department. The public partner may provide limited funding or other benefits (such as tax exemptions) but the private organisation accepts most of the risks.
The private organisation is then granted the right to own, maintain and operate the project for a set period of time, during which they can draw fees from users of the asset. Once the time period has elapsed, the control of the project transfers to the public sector partner, either freely or for a fee that is stipulated in the original contract. It is common for the time period to be several decades in the case of big infrastructure projects that carry a lot of construction and operational risk.
There are a number of other, related forms of procurement, which allocate rights and responsibilities differently:
- Build, operate, transfer (BOT), whereby the private organisation does not own the project as an asset, they merely receive a concession to operate it for a period of time.
- Build, lease, transfer (BLT), in which the public sector partner leases the project from the contractor and takes responsibility for its operation.
- Design, build, finance and operate (DBFO), which also assigns the design responsibility to the private organisation.
For more information see: Procurement routes.
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