BOT-Annuity
Also called: BOT (Annuity) · Topic: Infrastructure: Transport, Communications and Energy · NCERT: Beyond NCERT
Meaning
BOT-Annuity is a build-operate-transfer (BOT) model of public-private partnership (PPP). The private developer puts in 100% of the money, builds the asset and runs it. In return, the government pays the developer fixed annuities every six months over the concession period, which is the contract period. The government collects any tolls, so it bears traffic risk (the risk of low usage). At the end, the asset goes back to the government.
Example
A developer builds a highway entirely with its own funds. It then receives fixed half-yearly payments from the government for the concession period, whether traffic on the road is heavy or light.
Don't confuse with
- Hybrid annuity model (HAM): the government pays 40% of the cost during construction, and only the developer's 60% is repaid through annuities. In BOT-Annuity the developer funds everything.
- BOT-Toll: the developer collects tolls and bears traffic risk.
Related concepts
- Public-private partnership
- Concession agreement
- Engineering, procurement and construction
- Hybrid annuity model
- Annuity model
- BOT-Toll
- Build-operate-transfer
- Build-own-operate-transfer
- Build-own-operate
- Build-own-lease-transfer