Role of Private Sector Finance

Abstract

Build‐own‐operate‐transfer projects are receiving renewed interest in many countries. These include the United Kingdom where the government nevertheless imposes strict rules on their application. The first major infrastructure project in modern times in the United Kingdom to receive this treatment was the contract for the Dartford Bridge in 1986. The promoters and financial advisors so contained and allocated the various risks that the necessary debt was raised without any substantial equity base, thus minimizing the concession period and cost to government. Build‐own‐operate‐transfer projects can also be of value in lesser developed countries. But host governments need to understand the commercial realities and the promoters need realistically to assess the political risks and the inevitable extra costs. Failure on both sides has led to many disappointments. Engineers have a major part to play in this process, whether they exercise their discipline as contractor, consultant, or in the public sector.