Promoting new financing techniques, including Public-Private Partnerships and BOT models

The BOT approach may be seen by governments as the financing solution when public funding is insufficient for implementation of needed infrastructure projects. This concept does however not only provide capital from the private sector, but it does in particular also transfer risks related to implementation and operation of a project to the private sector. The overall objective of a BOT project is always to provide a reliable service to the consumers at affordable rates and thus providing value for money for the taxpayers. The successful achievement of this objective is based on that the government has a global and realistic approach to distributions of risks and rewards between the public and private sector. It also requires that the technical, environmental, regulatory, legal, financial and commercial viability of the project is correctly studied, assessed and prepared as well as that governments in general apply the best practices established in this field, including a transparent and open procurement process. The BOT procurement route brings value but is more complex than traditional public procurement. It is also a more costly process both for the public as well as the private sector and thus only projects of a certain size are suitable for BOT. Only project of high public priority and socio-economic viability shall be pursued. BOT shall not be the last resort for governments purely looking for financing for their infrastructure project and thus the choice of a BOT concept shall be a positive rather than a negative decision.

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