Last edited 01 Sep 2020

Design Build Operate Transfer DBOT


[edit] Introduction

There are many different routes by which the design and construction of a building can be procured. The selected route should follow a strategy which fits the long-term objectives of the client's business plan.

Design build operate transfer (DBOT), is generally a form of Public Private Partnership project (PPP) in which a single (private) contractor is appointed to design, build and operate a project on behalf of a (public) client before transferring operations and maintenance back to the client after an agreed period of time.

[edit] Public Private Partnerships

The term 'Public Private Partnerships' (PPP) refers to a very broad range of partnerships in which the public and private sectors collaborate. PPPs were first developed in the UK in the 1990s based on the belief that private sector companies might be more efficient at providing certain services than public authorities and so could deliver better value for money for taxpayers. Services included those associated with major infrastructure works such as roads, bridges, dams, railways, tunnels or maintenance and renewal of public facilities such as hospitals, schools, prisons, libraries, leisure centres and so on.

In the PPP model, the term ‘public’ refers to a project that is financed (or part financed) through a partnership between a private entity and a government. The project is then typically owned - and may be operated - by the private entity before ownership (and sometimes maintenance and operations) is then passed to the central or local government client.

[edit] Operations and transfer

Once the construction is complete, the contractor is granted the right to own, maintain and operate the project for a period of time. When this responsibility is transferred back to the public entity it is either done so freely or for a fee that is stipulated in the original contract.

This transfer typically occurs once the contractor has recovered its investment (or an agreed upon period of time has expired). It is common for the time period to be several decades in the case of large infrastructure projects that carry significant degrees of construction and operational risk.

In theory, this long term relationship encourages the contractor to develop a project with its overall performance in mind from the outset, rather than just considering the efficiency of its construction, as the contractor will be responsible for any high operating, maintenance or repairs bills. However, it ties both the client and the contractor into an very long-term arrangement that can be difficult to price. As a result, contractors may price considerable risk into their tenders, and so the client may not always achieve a best value outcome.

[edit] DBOT distinctions

DBOT is a variation on the build operate transfer (BOT) contract model, but in DBOT, the contractor designs as well as builds the project. This model can be attractive to some clients, as it designates a single point of responsibility for delivering the project and taking it through to operation.

DBOT differs from a design build finance and operate (DBFO) contract in which the contractor also finances the project and leases it to the client for an agreed period (perhaps 30 years) after which the development reverts to the client.

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