Ch. 10 PROJECT FUNDING

Ch. 10 PROJECT FUNDING - CHAPTER - 10 PROJECTFUNDING Click...

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Click to edit Master subtitle style PROJECT FUNDING CHAPTER - 10
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BUILD OPERATE  and TRANSFER (BOT) n Concept, stakeholders in BOT funding, see fig. n “In the BOT approach, a private party or concessionaire retains a concession for a fixed period from a public party, called principal (client), for the development and operation of a public facility. The development consists of the financing, design and construction of the facility, managing and maintaining the facility adequately and making it sufficiently profitable. The concessionaire secures return of investment by operating the facility and, during the concession period the concessionaire transfers the ownership of the facility free of liens to the principals at no cost.” n Accredited to the Turkish Government n Suez Canal by French in 19th century
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Confederation Bridge Crossing Stake Holders in BOT Funding
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ADVANTAGES n Traditionally, highways, dams, public buildings (e.g. jails), tunnels, etc. have been constructed using funds which were generated from taxes levied by public entities (e.g., federal, state and local gov’ts) n Privatization addresses the problems of developing infrastructure projects by utilizing private funds to finance and construct public projects n Concept of BOT approach became popular in the early 1980’s
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MONEY: A BASIC RESOURCE n The essential resource ingredients that must be considered in the construction of a project are usually referred to as four M’s n These basic construction resources are 1) money, 2) machines, 3) manpower and 4) materials n They are presented in this order since this is the sequence in which they will be examined in the next few chapters n Here are the first of these resources to be encountered in the construction process, money, is considered n Money (i.e., actual cash or its equivalent in monetary or financial transactions) is a cascading resource that is encountered at various levels within the project structure n The owner must have money available to initiate construction. The contractor must have cash available to maintain continuity of operations while he is waiting payment from the owner n The major agents involved in the flow of cash shown in fig. 10-1
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This note was uploaded on 11/11/2009 for the course CEIE 463 taught by Professor Bhargava during the Spring '09 term at George Mason.

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Ch. 10 PROJECT FUNDING - CHAPTER - 10 PROJECTFUNDING Click...

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