BOT-Toll
Also called: BOT (Toll) · Topic: Infrastructure: Transport, Communications and Energy · NCERT: Beyond NCERT
Meaning
BOT-Toll is a build-operate-transfer (BOT) model of public-private partnership (PPP). The private developer finances 100% of the project, builds it and runs it. It gets its money back by collecting tolls from users during the concession period, and then hands the asset to the government. Because its income depends on how many vehicles use the road, the developer bears traffic risk. Of all the main PPP models, this one gives the private side the most risk.
Example
India saw a boom in BOT-Toll roads in the 2000s. Around 2012 it turned to bust. Bids had assumed too much traffic, land acquisition was delayed, traffic fell short, and bank loans went bad. The government then shifted to EPC and HAM, where it takes back the traffic risk.
Don't confuse with
- Toll-operate-transfer (TOT): this applies to a road that is already operating. The private party pays the government an upfront lump sum for the right to collect tolls. It does not build anything new.
Related concepts
- Public-private partnership
- Concession agreement
- Engineering, procurement and construction
- Hybrid annuity model
- BOT-Annuity
- Annuity model
- Build-operate-transfer
- Build-own-operate-transfer
- Build-own-operate
- Build-own-lease-transfer