Road Traffic has been growing with very rapid rate i.e. 8 % per annum, hence the traffic intensity and volume on the road is high. The present road network is necessary to improve to accommodate the future traffic and to provide the good riding quality. The development of Infrastructure has been done by the public sector through the fund collected from taxes, but huge fund are required for modernization of road network.
Due to decreasing financial resources, government is not in position to invest the funds in those developments. This has brought to focus the need of attracting private investment in road in India. The funds provided by private sector for improvement of road condition are recovered from road user by toll tax. After recovery period that particular road section is transferred to government. This new Idea is called as BOT system.
1.1 ABOUT B.O.T. PROJECT:
B.O.T. (Build/Own/Transfer) projects are public infrastructure projects, which employ a particular form of structured financing. The involvement of the private sector in the development of infrastructure by way of BOT projects, alternatively called B.O.T. (Build- operate-transfer) is proving to be a challenging exercise.
BOT projects have several advantages such as-
1. The government gets the benefit of the private sector to mobilize finances and to use the best management skills in the construction, operation and maintenance of the project.
2. The private participation also ensures efficiency and quality by using the best equipment.
3. The projects are conducted in a fully competitive bidding situation and are thus completed at the lowest possible cost.
1.2 STRUCTURE OF BOT PROJECTS
In a B.O.T. arrangement, the private sector designs and builds the infrastructure, finances its construction and owns, operates and maintains it over a period, often as long as 20 or 30 years. This period is sometimes referred to as the “concession” period. Traditionally, such projects provide for the infrastructure to be transferred to the government at the end of the concession period.
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