Page 73 - BASIC PRINCIPLES OF QUANTITY SURVEYING PROFESSIONAL PRACTICES

Politeknik Kota Bharu

3.4.2.10 Advantages & disadvantages of built operate & transfer

procurement method

Advantages Disadvantages

▪ To provide new sources of ▪ Transaction expenses are high,
finance, private sector funding is accounting for 5-10% of the

being used. total project cost.

▪ Ability to expedite the ▪ Suitable for larger projects but
development of projects that not for smaller ones.

would otherwise have to wait for
independent resources and ▪ The success of the BOT project
compete for it. is depend on the ability to raise
the necessary funds.
▪ To lower project building costs,
shorten schedules, and ▪ Various costs, such as

increase operational efficiency, construction, equipment, and
private sector funding, initiative, maintenance, should be

and know-how are being used. committed throughout the
project's life cycle.
▪ Project risk and burden that
would otherwise have to be ▪ Only when substantial profits
absorbed by the public sector
are earned during the
are transferred to the private
operation phase of a BOT
sector.
project can it be considered a

▪ The involvement of private success.

sponsors and experienced
commercial lenders, which
assures a thorough examination

and is a further indication of

project viability.

57