Major Risks in Bot Road Projects in India

Abstract

Public Private Partnership is a mutual agreement or collaboration between the public sector, the government and the private sector. PPP is a framework that deals with the transfer of rights of designing and operating a project to a private company but keeps the basic tender rights for itself and when the project has been completed and the private company has operated it for the given concession period which may vary from 20 to 30 years the private company transfers it rights to the concerned authority. One of the most common operated model of PPP is Build Operate Transfer BOT. BOT deals with the right of the private company to design and build the project and then to operate and maintain it and after that it is transferred to the government. BOT projects have seen increased participations of private sector as they are the main bearers of the profits made and as the government lack funds so they seek it from the private companies. These projects also get investments from the foreign investors also. With the increased number of PPP projects being undertaken by private sector and increased investments in these projects there have been a rise in the number of problems or risks which have led to the delay in the completion of project period and have caused significant cost and time overruns. Public Private Partnership is a mutual agreement or collaboration between the public sector, the government and the private sector. PPP is a framework that deals with the transfer of rights of designing and operating a project to a private company but keeps the basic tender rights for itself and when the project has been completed and the private company has operated it for the given concession period which may vary from 20 to 30 years the private company transfers it rights to the concerned authority. One of the most common operated model of PPP is Build Operate Transfer BOT. BOT deals with the right of the private company to design and build the project and then to operate and maintain it and after that it is transferred to the government. BOT projects have seen increased participations of private sector as they are the main bearers of the profits made and as the government lack funds so they seek it from the private companies. These projects also get investments from the foreign investors also. With the increased number of PPP projects being undertaken by private sector and increased investments in these projects there have been a rise in the number of problems or risks which have led to the delay in the completion of project period and have caused significant cost and time overruns. This research deals with the issues and risks that arise with the BOT models during the project life cycle. The risks identified in the project occur in different phases of the project life cycle which are prequalification phase, tendering phase, construction phase and the concession phase. This research identifies the major risks involved and studies their impact using the RII analysis by comparing the responses in the questionnaire. Subsequently this research paper gives some mitigation strategies to handle the risks and gives insight to risk management