There are quite a few models used to finance large projects
in India, and one such model is BOT (built, operate, transfer), which is mostly
used to finance infrastructure projects developed through public-private
partnership. In this form of project financing, a private entity receives a
concession from private or public sector to design, construct, finance, own and
operate a facility, which is already mentioned in the concession contract.
BOT model enables project proponent to recover its
investment, operating and maintenance expenses in the project. The fees is
often raised during the concession period, due to the long-term nature of the
arrangement. The rate of increase is often linked to an amalgamation of
internal and external variables, and the proponent is allowed to reach a
satisfactory internal rate of return for its investment.
Expecting to earn a profit under BOT, a private company is
awarded a concession agreement by the government to finance, build and operate
a project for a period of 20-30 years. The project is returned to the public
entity that originally granted the concession at the end of concession
period.
When it comes to the BOT road projects, IRB Infrastructure
is known for executing India’s first BOT project and its ability to execute the
most complicated BOT road and highway projects on difficult terrains across
India. The company today operates one of the largest BOT portfolios in the
country with a total length of around 12,600 lane km.
IRB Infrastructure also maintains the infrastructure assets
as per concession agreement requirements, enhancing sustainability for all
stakeholders. With a portfolio comprising of a total of 22 BOT projects in road
and highways, the company is renowned for developing the country's first ever
BOT project. It also played an important role in Golden Quadrilateral Project,
accounting for 18.79 per cent of the total 5,846 kms of developed highway
network.
Having developed world-class roads and highways across the
country, IRB Infrastructure has earned
lot of credentials for becoming India's
leading player in BOT space.
How IRB Infrastructure operates one of the largest BOT portfolios in the country?
Reviewed by Newzpot
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