An assessment of the Build - Operate-Transfer (BOT) Model as an option to infrastructure project financing in Tanzania

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University of Dar es Salaam
This study makes a critical assessment of the Build - Operate - Transfer (BOT) concept with major focus to identifying possible issues that need special consideration and attention in the course of adopting the BOT model in Tanzania. An assessment of the current status of affairs with respect to environment conducive for BOT project is made. As the demand for infrastructure is far greater than the supply of funds available to provide new infrastructure, governments in developing countries are now exploring the private sector's participation in order to accelerate their development programs. BOT is one of the most popular approaches for temporary privatization of infrastructure. The Tanzanian Government has been exploring ways to enhance its key infrastructure projects. Faced with increased economic constraints on capital spending, reduced borrowing capacity and the need to service debts, the Government has stated that it is to adopt the BOT model. Accordingly, four road projects have been proposed for BOT arrangement as learnt from the June - August 1999 parliamentary budget session. The study concludes that the BOT model could be used as a mechanism to provide opportunity to finance infrastructure projects. However, the study suggests some preparatory measures that may need time. Firstly, BOT legal and regulatory framework has to be put in place with the intention to protect and guide investors, the government and users tailored for BOT projects from start to finish. Such policy should incorporate probable solutions that will address most of the issues that have been identified in this study. Secondly, for successful implementation of the BOT strategy, a credible and efficient administrative framework has to be ensured. It may require set up of an institution to handle the BOT projects. Thirdly, creation of awareness among all stakeholders is an important preparatory measure. Seminars, campaigns, and other deliberate efforts to educate public on the BOT concepts and their effects are extremely crucial for smooth adoption among the public at large. Fourthly, long and short-term training, study tours, and on-job training of personnel tailored to handle BOT projects are important aspects for the long term capacity building.
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Building, Operate, Transfer (BOT), Construction industry, Tanzania, Financial engineering
Mallya, J. M. M. (2000) An assessment of the Build - Operate-Transfer (BOT) Model as an option to infrastructure project financing in Tanzania, Masters’ dissertation, University of Dar es Salaam. Available at (