1. Presented by: Alaa Albesher

2. Outline:  Introduction.  Decision Factors.  Risk Factors.  Critical Success Factors.  Conclusion.

3. Introduction:  BOT.  BOT types.  Different variations depending on occasions or countries.  BOT need.  BOT is especially popular in developing countries.  BOT advantages.

4. Decision Factors:  Decision under uncertainty.  Decision sequence.  Multiple alternatives.  Multiple interests.

5. Risk Factors: 1. Political risk. 2. Financial risk. 3. Operation risk. 4. Construction risk. 5. Market risk.

6. 1. Political Risk:  The source is the potential of political events to occur such as war or revolution.  This risk is more significant in developing countries.

7. 2. Financial Risk:  The source is the oscillations in exchange rates between currencies, interest rate, and inflation.  This risk is more significant in developing countries.

8. 3. Operation Risk:  The source of this risk is the probability of actual operation and maintenance costs to exceed planned costs.

9. 4. Construction Risk:  The risk is related to the delays of project completion and cost overruns.  Delays causes are technical problems, poor management, or both combined together.  Operation and Construction risks are more manageable.

10. 5. Market Risk:  Demand risk from doubts of demand regarding the project products.  Price risk related to the probability of price change for the project products.

11. Critical Success Factors: 1. Entrepreneurship and leadership. 2. Right project identification. 3. Strength of the consortium. 4. Technical solution advantage. 5. Financial package differentiation. 6. Differentiation in guarantees.

12. 1. Entrepreneurship and Leadership:  Defined as the pursuit of opportunities beyond the financial and technical resources that the entrepreneur currently possesses.  There are three sub factors:  Risk taker.  Cultivating goodwill with host government.  Leadership of a key entrepreneur.

13. 2. Right Project Identification:  Choosing the right project to pursue is very essential factor for successful BOT project.  This factor include accurate prediction of need and lack of funds by host government.

14. 3. Strength of the Consortium:  The consortium must be strong to win the BOT project contract by having financial strength and multinational team.

15. 4. Technical Solution Advantage:  Having technical solutions that provide cost reduction will generate a competitive advantage and attractive proposal.  Other ways of having solution advantage could be by shorter construction period, good environmental impact, and public safety.

16. 5. Financial Package Differentiation:  Financial package will provide cost advantage and make the proposal unique.  Cost advantage requires low construction cost, acceptable tariff levels, reasonable equity to dept ratio, and short concession period.

17. 6. Differentiation in Guarantees:  Special features or guarantees differentiate a proposal from others.  Special features should demonstrate the humanity of the project and ensure fears the host government might have.  Less guarantees requirements are preferable by governments.

18. Conclusion:  A viable mechanism for infrastructure was needed resulted in BOT.  There are many factors affect the decision making of taking a BOT project or not.  Risks involved in BOT projects must be considered and assessed.  Six critical success factors are common in success BOT projects.

19. Thank you for listening Any Questions!