Q. Which of the following is/are the advantages of Build-Operate-Transfer (BOT) Model?
1.The model provides a mechanism and incentives for enterprises to improve efficiency.
2.The risks of the project are shared by the private sector.
3.Smaller projects can be completed in a short time along with low upfront cost.
Select the correct answer using the codes given below;
Answer: B
Notes:
Statement 1 is correct: BOT provides a mechanism and incentives for enterprises to improve efficiency through performance-based contracts and output-oriented targets.
Statement 2 is correct: Under this model, the risks of the project are shared by the private sector.
Statement 3 is incorrect: It may take a long time and considerable up front expenses to prepare and close a BOT financing deal as it involves multiple entities and requires a relatively complicated legal and institutional framework. There the BOT may not be suitable for small projects.
Source: Indian Express
