THE BOT OPTION - CONFLICTS AND COMPROMISES

The build, operate and transfer (BOT) and the build, operate and own ( BOO) arrangements have emerged as the most important private power inv estment options in developing countries. Although there is a huge mark et for such arrangements, since they are complex to negotiate, involve perceptions of risk that are not always properly understood and invol ve unusual cost, contracting, cash flow and returns to equity issues, the number of projects successfully launched have been few This paper is concerned with exploring these issues in a systematic way, dispelli ng certain myths and discussing how mutually useful arrangements can b e reached between a host utility and private developers on a fair and level playing field.