Rehabilitate-operate-transfer
Also called: ROT · Topic: Infrastructure: Transport, Communications and Energy · NCERT: Beyond NCERT
Meaning
Rehabilitate-operate-transfer (ROT) is a PPP model for an existing asset that has become old or run-down. A private party first rehabilitates it, which means repairing and refurbishing it. It then operates the asset for a set period, called the concession period, and recovers its money from the asset's revenue. At the end, it returns the asset to the government. ROT makes sense when an asset is still useful but needs money and skill to bring it back to good condition.
Example
A city's old water-treatment plant is leaking and working below capacity. A private firm repairs the pipes and machines, runs the plant for a fixed number of years while earning from water charges, and then hands it back to the city.
Don't confuse with
- Operate-maintain-transfer (OMT): under OMT the private party only runs and maintains an asset that is already in working order, while ROT starts with major repair.
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