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.