A Review of Risks and Mitigation Measures in Build-Operate-Transfer Projects

Infrastructure investments are important in developing countries, it will not only help to foster the economic
growth of a nation but it will also act as a platform in which new forms of partnership and collaboration can
be developed mainly in East Asian countries. In the past two decades, many infrastructure projects have
been completed through the build-operate-transfer (BOT) type of procurement. The development of BOT
have attracted participation from local and foreign private sector investors, to secure funding and to deliver
projects on time, within the budget and to the required specifications. The private sector was preferred by
the governments in East Asia to participate in BOT projects due to lack of public funding which had caused
the private sector or promoter of the BOT projects to be exposed to multiple risks. These risks are discussed
in this paper. Effective risk management methods and good managerial skills were required in ensuring the
success of the project. The review indicated that mitigation measures should be employed by the promoter
throughout the concession period and support from the host government is also required in ensuring the
success of the BOT project.