Lease-develop-operate
Also called: LDO · Topic: Infrastructure: Transport, Communications and Energy · NCERT: Beyond NCERT
Meaning
Lease-develop-operate (LDO) is a public-private partnership (PPP) model for a facility that already exists. A private party takes the facility on lease, which means it rents it from the government for a fixed term. It then upgrades the facility, runs it, and pays lease rent to the government. Ownership stays with the government throughout. The model brings in private money and management without selling a public asset. In India it is used for airports.
Example
A state-run airport is leased to a private firm. The firm builds a bigger terminal, runs the airport and earns from airline and passenger charges. In return, it pays the government lease rent for the whole term.
Don't confuse with
- Build-operate-transfer (BOT): the private party builds a new asset, while under LDO it upgrades one that already exists.
- Rehabilitate-operate-transfer (ROT): both models improve existing assets, but LDO is based on a lease with regular rent payments to the government.
Related concepts
- Public-private partnership
- Concession agreement
- Engineering, procurement and construction
- Hybrid annuity model
- BOT-Annuity
- Annuity model
- BOT-Toll
- Build-operate-transfer
- Build-own-operate-transfer
- Build-own-operate