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International Journal of Modern Engineering Research (IJMER)
                    www.ijmer.com          Vol.3, Issue.1, Jan-Feb. 2013 pp-324-330      ISSN: 2249-6645


                       Success Factors for Build Operate Transfer (BOT)
                                 Power Plant Projects in Iran

                                      Aminah Binti Yusof, 1 Bahman Salami2
                1
                    (Associate Professor, Faculty of Civil Engineering, Universiti Teknologi Malaysia, Malaysia)
                     2
                       (PhD Candidate, Faculty of Civil Engineering, Universiti Teknologi Malaysia, Malaysia)

 Abstract: Iranian electric power industry has adopted Build Operate Transfer (BOT) approach in a number of projects as
an alternative to utilize private sector investment. Therefore, some power plant projects have been successfully implemented
through BOT such as South Isfahan power plant as a first BOT power plant; in contrast, some of them have been failed in
the procurement process. Thus, there is a need for improving procurement approaches for future BOT projects. This study
identifies and analysis various success factors in BOT power plant projects in Iran. The research methodology that has been
utilized including literature review, and survey questionnaire have distributed to BOT experts. Hence, this research
establishes success factors for BOT power plant project in Iran comprise of 33 factors. All 33 success factors are considered
as important factors in BOT infrastructure projects; moreover, there is a good agreement in significance of success factors
between government organization, consultants, and concessionaires.

Keywords: Success Factors, Power Plant, BOT, Iran

                                                    I. INTRODUCTION
          The desire to attain the sustainability, in terms of economic, social and environmental demands the innovative
project undertaking. The innovative approach involves private sector especially in funding the project. In 80th decade, many
Asian countries started privatization of infrastructure to improve public facilities and increase the life level [1], [2], [3], [4],
[5]. The attractiveness of Build Operate and Transfer (BOT) approach has increased in developing countries due to the
advantages offered by the approach. The main advantage is the chances of government to utilize private sector’s investment,
management, and technology. Previous studies have assessed the market potential for producing the power, absorbing
foreign and local investment engaged in BOT procurement.
          On the other hand, some BOT infrastructure projects have been failed around the world. Therefore, government and
promoters should notice to the l success factors in these projects. There are some existing researches in CSFs of BOT
projects around the world such as [6], [7], [8]. These studies have been done in CSFs of BOT projects only in China while it
needs to identify CSFs in other countries that have utilized BOT approach in their infrastructure projects. Therefore, since
there is no study to date in CSFs in BOT power plant projects in Iran, the research in this area will help both government
organization and concessionaire. This paper identifies critical success factors (CSFs) in BOT power plant projects in Iran.

                                              II. BOT POWER PLANT IN IRAN
          After changing economic trends in Iran, and with particular attention to the utilization of non-government sector
resources, Iran’s Ministry of Energy started to attract local and foreign investment by BOT and BOO methods to implement
infrastructure projects in power industry. The first power plant project proposed for private sector investment in construction
of power plant was in Kerman province in 1995. However it was dropped after the withdrawal of investor. Then, in 1999,
Parehsar power plant project in Gilan province proposed as an international tender was selected to be an international
consortium; however, the project was stopped due to the structural problems in the implementation process. Since
cancellation of that project, many projects came into negotiation but none of them reached to the stage of implementation.
          Thus, the authorities in charge of the Iranian power industry and MAPNA Company initiated to remove the existing
impediments in the way of the execution of such plans by creating a new project [9]. Until now, South Isfahan Power Plant
has been identified as a pioneer and first Iranian IPP project. Given the nature of the project, the direct-negotiation-procedure
was selected for the assignment of works. The South Isfahan BOT project was thus launched. This project is the first BOT
Power Plant project that has been put into operation in the Iranian power industry. In this regard, a pre-agreement was signed
between Iran Power Development Corporation (IPDC) and MAPNA International Company in 2002. The period of time
specified for construction period was 3 years, and 20 years for the commercial operation period following the Commercial
Operation Date (COD) of the power plant. Recently, the government has decided to transfer the majority of the power plant
to the private sector; therefore, the government encourages the private sector to utilize Build Own Operate (BOO) approach
in power plant project. BOO is similar to BOT but without transferring to government, commonly used in Australia at the
beginning [10]. Table I illustrates BOT and BOO power plant projects in Iran.




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International Journal of Modern Engineering Research (IJMER)
                 www.ijmer.com          Vol.3, Issue.1, Jan-Feb. 2013 pp-324-330      ISSN: 2249-6645

                          Table I: A list of power projects via BOT and BOO approaches in Iran
                                                                   Project
Project                           Method of       Capacity         Investment   Concessio
                Type of Power                                                                            Status
Name                              Investment      (MW)             Value        n Period
                                                                   (million €)
South Isfahan      Gas                 BOT              954                320              20           In Operation
   Fars            Gas                 BOT              972                550              20           In Operation
Parehsar        Combined Cycle         BOT              968                550              20           In Construction
South Isfahan      Steam               BOT              480                -----            20           In Planning
Mianeh          Combined Cycle         BOT              1000               -----            20           In Planning
Rafsanjan       Combined Cycle         BOT              1000               ----             20           In Planning
Rudeshur           Gas                 BOO              2000               700              ----         In Operation
Asaluyeh2          Gas                 BOO              1000               350              ----         In Operation
Ferdos             Gas                 BOO              1000               350              ----         In Operation
Kahnuj2         Combined Cycle         BOO              50                 31               ----         In Operation
Noshahr         Combined Cycle         BOO              50                 31               ----         In Operation
Ali Abad           Gas                 BOO              1000               350              ----         In Operation
Khoramshar         Gas                 BOO              1500               525              ----         In Construction
Genaveh         Combined Cycle         BOO              500                310              ----         In Construction
Khoram          Combined Cycle         BOO              1000               620              ----         In Construction
Abad
Kahnuj1         Combined Cycle         BOO              1000               620              ----         In Construction
Islam Abad      Combined Cycle         BOO              500                310              ----         In Construction
Yazd2           Combined Cycle         BOO              500                310              ----         In Construction
Isfahan2        Combined Cycle         BOO              500                310              ----         In Construction


                                             III. RESEARCH METHODOLOGY
3.1.     The procedure
         The quantitative research methodology was employed in this research. Therefore, the research methodology was
considered for this study in two stages:
 The first stage was a widespread literature review and interview with BOT experts to identify the success factors in BOT
    projects. The most significant reviewed pervious researches included [11], [6], [12], [13], [14], [7], [15], [16], [17], [8],
    [18]. The CSFs related to BOT projects were identified and recognized success factors with the most agreement by these
    researchers as a benchmark for further researches. Hence, 33 success factors were identified in BOT infrastructure
    projects.
 The second stage was a survey questionnaire to government organizations, consultants, and concessionaires conducted
    to evaluate the criticality of the listed CSFs.

3.2.     The survey sample
         The questionnaire explored some barriers that BOT power plant project encounter them. Therefore, the
questionnaire was conducted with BOT participants involved in the Iranian electric power industry. For this purpose, the
questionnaire was distributed to government organization, consultants, and concessionaires. A total of 142 questionnaires
were distributed to BOT and BOO experts according to three above categories. They were dispersed only by the researcher,
person by person, in order to help them if it is necessary. Moreover, this method of questionnaire distribution makes direct
access to the respondents to ensure that the respondents realize the requirements of the questionnaire. The direct method is
significant in encouraging respondent to answer the detailed questionnaire. A total of 129 questionnaires were gathered.
From this number, 123 questionnaires were considered as valid questionnaires for analysis (Table II).

                            Table II: Distributed, returned, and missing questionnaire comparison
                                         Description              Quantity     Percentage (%)

                                  Questionnaire distributed          142              100
                                   Questionnaire returned            129               91
                                   Questionnaire valid and           123              86.5
                                          returned
                                          Missing                    19               13.5



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International Journal of Modern Engineering Research (IJMER)
                 www.ijmer.com          Vol.3, Issue.1, Jan-Feb. 2013 pp-324-330      ISSN: 2249-6645

          The questionnaire was written in English language, but it was translated to Persian language because the study area
was in Iran, and questionnaires were distributed among Iranian experts in BOT projects and also to facilitate easier reading
and compatibility of understanding. The Likert scale was selected to obtain weight of 33 success factors to BOT power plant
project in Iran. In this type of question, the respondents answer based on the amount of importance where 1 represented “not
important”, 2 “less important”, 3 “important”, and 4 “most important”.

3.3.       Data Analysis
           The respondents are grouped into their position in organization or company including Managing Director, Project
Manager, Technical Manager, Financial Manager, Planning Manager, and Junior Manager. These questionnaires’ results are
considered as reliable and valid, since the majority of the respondents were in positions of senior or middle manager. Table
III illustrates the position of respondents in their organization or company.


                               Table III: Position of respondents in their organization/company
                               Managing        Project     Technical Financial Planning         Junior           Total
                                Director      Manager       Manager       Manager Manager Manager
           Public Sector          ------          18               3              -----       6         15        42
          Concessionaires         ------          15               3                6         6         18        48
           Consultants              3             15               6              -----       6         3         33
              Total                 3             48               12               6         18        36        123

         On the other hand, these questionnaires’ results are considered as reliable and valid in terms of their academic
qualification. It means that 49 percent (60 people) of respondents approximately possess the Bachelor Degree and 51 percent
(63 people) possess the Master Degree. Figure 1 shows number of respondents’ academic qualification in three categories.




                                             Figure1. Academic qualification of respondents

          In order to increase the reliability and validity of data collection, all respondents were selected through experts who
had experience in BOT infrastructure projects in Iran. In public organization, 15 respondents have 6-10 years experience in
BOT power plant projects and 9 respondents have less than 6 years experience in this field. It means that 78.5 percent of the
respondents have more than 6 years experience in BOT projects. Moreover, in concessioners, 33 respondents have 6-10
years experience in BOT power plant projects and 12 respondents have less than 6 years experience in this field. It clearly
seems that the majority of respondents (75%) have experience in BOT project more than 6 years. Finally, in consultants’
category, around half of the respondents (45.5%) have more than 6 years experience in BOT power plant projects in Iran.
Therefore, it corroborates to obtain high-quality data to ensure regarding the reliability and validity of data collection. Figure
2 illustrates the experience of respondents in BOT infrastructure projects.




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International Journal of Modern Engineering Research (IJMER)
                www.ijmer.com          Vol.3, Issue.1, Jan-Feb. 2013 pp-324-330      ISSN: 2249-6645



                          35
                          30
                          25
                                                                                                        5 years
                          20
                                                                                                        6-10 years
                          15
                                                                                                        11-15 years
                          10
                                                                                                        16-20 years
                           5
                           0
                                    Public         Concessionaires        Consultants
                                 Organization


                                    Figure2. Experience of respondents in BOT infrastructure projects

          On the other hand, in public organization, 15 respondents have collaborated in 2-5 BOT power plant projects, 9
respondents in 6-10 projects and also 12 respondents in more than 11 projects. It means that 85 percent of respondents have
cooperated in more than 2 BOT power plant projects. In concessionaires’ category, 18 respondents have been involved only
one BOT power plant projects, 27 respondents in 2-5 projects, and 3 respondents in 6-10 projects. Therefore, this refers to
62.5 percent cooperation of the respondents in more than 2 BOT power plant projects. Furthermore, in consultants’ category,
21 respondents have worked in 2-5 BOT power plant projects, 3 respondents in 6-10 projects, and 3 respondents in more
than 11 projects. This implies to 82 percent collaboration of the respondents in more than 2 BOT power plant projects.
Finally, it is concluded that the majority of the respondents (75%) have totally been involved in more than 2 BOT power
plant projects. The respondents’ participation in BOT infrastructure projects in Iran is indicated in Figure 3.




                               30
                               25
                               20
                                                                                                    1 project
                               15
                                                                                                    2-5 projects
                               10                                                                   6-10 projects
                                5                                                                   11 or above projects
                                0




                                          Figure3. Respondents’ participation in BOT projects




          The method utilized in this research was one-way ANOVA data analysis. This method is used where we have one
independent variable whit three or more levels (groups) and one dependent continuous variable. As mentioned earlier, there
are three categories of the respondents including government organization, concessionaires, and consultants. This method of
analysis is also utilized to show the differences or similarities of their comments.

                                              IV. FINDING AND DISCUSSION
         Thirty three success factors have been considered to recognize respondents’ ideas in these three classifications
including consultants (33 persons), the government organization (42 persons), and concessionaires (48 persons). The mean
scores of assigned by consultants to Appropriate project identification, Stable political situation, Favorable legislation
regulation, and Well-organized and committed public agency are greater than 3.50. This indicates that these three factors are
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International Journal of Modern Engineering Research (IJMER)
                 www.ijmer.com          Vol.3, Issue.1, Jan-Feb. 2013 pp-324-330      ISSN: 2249-6645

the most important factors in view of consultants (Table IV). On the other hand, the mean scores of twenty nine sub-factors
have been considered between 2.50 to 3.50. These sub-factors comprise of Favorable project management, Attractive
financial package, Reasonable risk allocation, Government support, Commitment and responsibility of public and private
sectors, Competitive and transparent procurement process, Experience with BOT project by public sector, Utilize local
company in project company, Technology transfer, and Concrete concession agreement, Select suitable consortium,
Overhauling guarantees, Sound environment impact, Training local staff, A multidisciplinary and multinational team, Short
concession period, Good relationship with government, Public safety, Social support, Profit sharing with government,
Special guarantees by the government, Select suitable subcontractor, Standardization of engineering contract, Multilateral
investment guarantees agency insurance, Technical solution advance, Quality control and supervision, Capability to lead
project by government, Operation in good condition, and Financial market availability. This refers to the significance of
these 29 success factors in view of consultants. Therefore, in their viewpoint, all thirty three success factors are regarded as
important or the most important factors because their mean scores are greater than 2.50.
                    Moreover, in government organization, the success factor of Attractive financial package has the highest
mean score (3.67) and is considered as the most important through all thirty three sub-factors. This is followed by Stable
political situation (score of 3.64), Favorable legislation regulation (score of 3.62), Reasonable risk allocation (score of 3.59),
and Favorable project management (score of 3.51) by considering of mean score more than 3.50. Furthermore, the mean
scores of twenty eight factors have been considered between 2.50 to 3.50. These factors comprise of Appropriate project
identification, Technical solution advance, Technology transfer, Utilize local company in project company, Reasonable risk
allocation, Commitment & responsibility of public & private sectors, Concrete concession agreement, Select suitable
consortium, Government support, Overhauling guarantees, Profit sharing with government, Good relationship with
government , Training local staff, Quality control and supervision, Sound environment impact, Select suitable subcontractor,
A multidisciplinary and multinational team, Standardization of engineering contract, Short concession period, Competitive
& transparent procurement process, Public safety, Experience with BOT project by public sector, Multilateral investment
guarantees agency insurance, Capability to lead project by government, Special guarantees by the government , Well-
organized & committed public agency, Operation in good condition, Social support, and Financial market availability. This
implies that these 28 aforementioned success factors are important in view of government organization. Therefore, in their
viewpoint, all thirty three critical success sub-factors are also regarded as important or the most important factors because of
their mean scores greater than 2.50.
          Furthermore, in category of concessionaires, the success factors of Capability to lead project by government has the
highest mean score (3.63) and is considered the most important through of all thirty three sub-factors. The mean scores
assigned to Stable political situation, Favorable legislation regulation, and Appropriate project identification are greater than
3.50. In other words, this indicates the importance of these three factors through others in concessionaires’ viewpoint.
Moreover, the mean scores of twenty nine factors consist of Experience with BOT project by public sector, Competitive and
transparent procurement process, Special guarantees by the government, Commitment and responsibility of public and
private sectors, Social support, Utilize local company in project company, Government support, Concrete concession
agreement, Select suitable consortium, Technology transfer, Standardization of engineering contract, Good relationship with
government, Favorable project management , Profit sharing with government, Technical solution advance, Sound
environment impact, Quality control and supervision, Training local staff, A multidisciplinary and multinational team, Public
safety, Reasonable risk allocation, Select suitable subcontractor, Overhauling guarantees, Attractive financial package,
Multilateral investment guarantees agency insurance, Well-organized & committed public agency, Short concession period,
Operation in good condition, and Financial market availability have been considered between 2.50 to 3.50. This implies that
these 29 success factors are important in view of concessionaires. Therefore, because of the mean scores of all 33 success
factors greater than 2.50, they are concerned as important or the most important factors in view of the concessionaires.
          In Table IV, from the analysis, it is concluded that the most important sub-factors (rank 1) in viewpoint of three
categories respondents are Appropriate project identification” for consultants, Attractive financial package for a government
organization, and Capability to lead the project by government for concessionaires. Appropriate project identification is the
most important success factors in project procurement system in consultants’ view because it needs to utilize especial experts
in BOT projects by the government. While, government organization respondents pointed to the attractive financial package
as the most significant factors in BOT projects because they have concentrated on the best financial proposal by
concessionaires to solve their limited budget. In contrast, concessionaires noticed to the government’s ability to lead projects
because it is more important to success the infrastructure projects in their viewpoint. The least important factor (rank 33)
belongs to Financial market availability for all three classifications of the respondents. In other words, all respondents
believe that financial market availability does not play significant role as the success factor in BOT infrastructure projects.
          Eventually, although there are some differences in rank, the mean scores are very close and more than 2.50. Hence,
all 33 success factors are considered as important factors in BOT infrastructure projects. There is no important difference
between consultants, government organization, and concessionaires in respect of the success factors in BOT infrastructure
projects according to the statistical results (significance) because significant indexes are more than 0.05 [19].




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           www.ijmer.com          Vol.3, Issue.1, Jan-Feb. 2013 pp-324-330      ISSN: 2249-6645

  Table IV: Views of consultants, government organization, and concessionaires about success factors in BOT projects
                                    Consultants (N=33)          Government         Concessionaires (N=48)
         Success Factors                                     Organization (N=42)                            Significance

                                   Mean    S.D.    Rank    Mean     S.D.    Rank   Mean     S.D.    Rank

Appropriate project                3.70    0.60      1      3.41    0.63      6    3.53     0.65      4        0.827
identification

Stable political situation         3.67    0.54      2      3.64    0.58      2    3.60     0.57      2        0.887

Favorable legislation regulation   3.64    0.55      3      3.62    0.58      3    3.58     0.61      3        0.916

Well-organized & committed         3.54    0.88      4      3.02    0.87     30    3.04     0.85     30        0.776
public agency

Favorable project management       3.49    0.51      5      3.51    0.55      5    3.19     0.58     18        0.850

Attractive financial package       3.47    0.69      6      3.67    0.49      1    3.06     0.73     28        0.900

Reasonable risk allocation         3.44    0.71      7      3.59    0.75      4    3.13     0.76     24        0.767

Government support                 3.42    0.78      8      3.26    0.73     13    3.31     0.72     10        0.834

Commitment & responsibility of     3.40    0.61      9      3.31    0.64     10    3.33     0.60      8        0.835
public & private sectors

Competitive & transparent          3.38    0.70     10      3.07    0.71     24    3.39     0.71      6        0.952
procurement process

Experience with BOT project by     3.35    0.77     11      3.07    0.78     26    3.41     0.80      5        0.787
public sector

Utilize local company in project   3.30    0.68     12      3.33    0.69      9    3.31     0.70      9        0.980
company

Concrete concession agreement      3.27    0.67     14      3.31    0.68     11    3.29     0.68     12        0.973

Technology transfer                3.27    0.63     13      3.36    0.66      8    3.25     0.67     14        0.774

Select suitable consortium         3.24    0.66     15      3.29    0.67     12    3.27     0.68     13        0.962

Overhauling guarantees             3.22    0.61     16      3.23    0.63     14    3.11     0.65     27        0.947

Sound environment impact           3.21    0.60     17      3.14    0.68     19    3.17     0.69     19        0.904

Good relationship with             3.18    0.77     21      3.19    0.74     16    3.20     0.74     16        0.987
government

Short concession period            3.18    0.73     20      3.10    0.69     23    2.96     0.77     31        0.384

Training local staff               3.18    0.58     18      3.17    0.62     17    3.15     0.68     21        0.968

A multidisciplinary and            3.18    0.58     19      3.12    0.67     21    3.15     0.68     22        0.918
multinational team

Public safety                      3.15    0.67     22      3.07    0.75     25    3.13     0.70     25        0.880

Social support                     3.13    0.70     23      2.71    0.67     32    3.31     0.65     11        0.853

Special guarantees by the          3.12    0.70     25      3.02    0.72     29    3.36     0.74      7        0.838
government

Profit sharing with government     3.12    0.60     24      3.19    0.64     15    3.19     0.64     17        0.869

Select suitable subcontractor      3.11    0.60     26      3.12    0.62     20    3.12     0.63     26        0.980

Multilateral investment            3.10    0.77     28      3.05    0.73     27    3.04     0.77     29        0.955
guarantees agency insurance

Standardization of engineering     3.10    0.53     27      3.11    0.57     22    3.24     0.61     15        0.852
contract

Technical solution advance         3.09    0.58     29      3.36    0.65      7    3.17     0.63     20        0.863

Quality control and supervision    3.06    0.61     30      3.14    0.65     18    3.15     0.65     23        0.812

Capability to lead project by      3.00    0.75     31      3.05    0.82     28    3.63     0.77      1        0.915
government

Operation in good condition        2.91    0.88     32      2.83    0.88     31    2.79     0.90     32        0.842

Financial market availability      2.79    0.86     33      2.57    0.89     33    2.66     0.90     33        0.259

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International Journal of Modern Engineering Research (IJMER)
                   www.ijmer.com          Vol.3, Issue.1, Jan-Feb. 2013 pp-324-330      ISSN: 2249-6645

                                                          V. CONCLUSION
          BOT approach has a key role in rapid development of Iranian electric power industry to provide energy for massive
demand in economic growth. According to extensive literature review, this research establishes success factors for BOT
power plant project in Iran comprise of 33 factors.
          In This study, 123 valid questionnaires were received from the respondents including government organization,
consultants, and concessionaires. These questionnaires’ results are considered as reliable and valid since the majority of the
respondents were in positions of senior or middle manager. Moreover, majority of the respondents had BOT experience
more than 6 years in government organization and concessionaires.
          From the analysis, the mean scores of assigned by consultants to Appropriate project identification, Stable political
situation, Favorable legislation regulation, and Well-organized & committed public agency are greater than 3.50. This
indicates that these three factors are the most important factors in view of the consultants. For government organization, the
success factor of Attractive financial package has the highest mean score (3.67) and is considered the most important
through all thirty three sub-factors. Capability to lead the project by government with highest mean scores (3.63) is
considered as the most important factors through all 33 success factors by concessionaires. The assigned mean scores to
Stable political situation, Favorable legislation regulation, and Appropriate project identification are greater than 3.50.
Despite the difference in ranking, the mean scores are very close and more than 2.50. Therefore, the respondents believe that
all thirty three success factors are important in BOT infrastructure projects. There are no significant differences between
consultants, government organization, and concessionaires in respect of the success factors in BOT power plant projects in
Iran.

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Cb31324330

  • 1. International Journal of Modern Engineering Research (IJMER) www.ijmer.com Vol.3, Issue.1, Jan-Feb. 2013 pp-324-330 ISSN: 2249-6645 Success Factors for Build Operate Transfer (BOT) Power Plant Projects in Iran Aminah Binti Yusof, 1 Bahman Salami2 1 (Associate Professor, Faculty of Civil Engineering, Universiti Teknologi Malaysia, Malaysia) 2 (PhD Candidate, Faculty of Civil Engineering, Universiti Teknologi Malaysia, Malaysia) Abstract: Iranian electric power industry has adopted Build Operate Transfer (BOT) approach in a number of projects as an alternative to utilize private sector investment. Therefore, some power plant projects have been successfully implemented through BOT such as South Isfahan power plant as a first BOT power plant; in contrast, some of them have been failed in the procurement process. Thus, there is a need for improving procurement approaches for future BOT projects. This study identifies and analysis various success factors in BOT power plant projects in Iran. The research methodology that has been utilized including literature review, and survey questionnaire have distributed to BOT experts. Hence, this research establishes success factors for BOT power plant project in Iran comprise of 33 factors. All 33 success factors are considered as important factors in BOT infrastructure projects; moreover, there is a good agreement in significance of success factors between government organization, consultants, and concessionaires. Keywords: Success Factors, Power Plant, BOT, Iran I. INTRODUCTION The desire to attain the sustainability, in terms of economic, social and environmental demands the innovative project undertaking. The innovative approach involves private sector especially in funding the project. In 80th decade, many Asian countries started privatization of infrastructure to improve public facilities and increase the life level [1], [2], [3], [4], [5]. The attractiveness of Build Operate and Transfer (BOT) approach has increased in developing countries due to the advantages offered by the approach. The main advantage is the chances of government to utilize private sector’s investment, management, and technology. Previous studies have assessed the market potential for producing the power, absorbing foreign and local investment engaged in BOT procurement. On the other hand, some BOT infrastructure projects have been failed around the world. Therefore, government and promoters should notice to the l success factors in these projects. There are some existing researches in CSFs of BOT projects around the world such as [6], [7], [8]. These studies have been done in CSFs of BOT projects only in China while it needs to identify CSFs in other countries that have utilized BOT approach in their infrastructure projects. Therefore, since there is no study to date in CSFs in BOT power plant projects in Iran, the research in this area will help both government organization and concessionaire. This paper identifies critical success factors (CSFs) in BOT power plant projects in Iran. II. BOT POWER PLANT IN IRAN After changing economic trends in Iran, and with particular attention to the utilization of non-government sector resources, Iran’s Ministry of Energy started to attract local and foreign investment by BOT and BOO methods to implement infrastructure projects in power industry. The first power plant project proposed for private sector investment in construction of power plant was in Kerman province in 1995. However it was dropped after the withdrawal of investor. Then, in 1999, Parehsar power plant project in Gilan province proposed as an international tender was selected to be an international consortium; however, the project was stopped due to the structural problems in the implementation process. Since cancellation of that project, many projects came into negotiation but none of them reached to the stage of implementation. Thus, the authorities in charge of the Iranian power industry and MAPNA Company initiated to remove the existing impediments in the way of the execution of such plans by creating a new project [9]. Until now, South Isfahan Power Plant has been identified as a pioneer and first Iranian IPP project. Given the nature of the project, the direct-negotiation-procedure was selected for the assignment of works. The South Isfahan BOT project was thus launched. This project is the first BOT Power Plant project that has been put into operation in the Iranian power industry. In this regard, a pre-agreement was signed between Iran Power Development Corporation (IPDC) and MAPNA International Company in 2002. The period of time specified for construction period was 3 years, and 20 years for the commercial operation period following the Commercial Operation Date (COD) of the power plant. Recently, the government has decided to transfer the majority of the power plant to the private sector; therefore, the government encourages the private sector to utilize Build Own Operate (BOO) approach in power plant project. BOO is similar to BOT but without transferring to government, commonly used in Australia at the beginning [10]. Table I illustrates BOT and BOO power plant projects in Iran. www.ijmer.com 324 | Page
  • 2. International Journal of Modern Engineering Research (IJMER) www.ijmer.com Vol.3, Issue.1, Jan-Feb. 2013 pp-324-330 ISSN: 2249-6645 Table I: A list of power projects via BOT and BOO approaches in Iran Project Project Method of Capacity Investment Concessio Type of Power Status Name Investment (MW) Value n Period (million €) South Isfahan Gas BOT 954 320 20 In Operation Fars Gas BOT 972 550 20 In Operation Parehsar Combined Cycle BOT 968 550 20 In Construction South Isfahan Steam BOT 480 ----- 20 In Planning Mianeh Combined Cycle BOT 1000 ----- 20 In Planning Rafsanjan Combined Cycle BOT 1000 ---- 20 In Planning Rudeshur Gas BOO 2000 700 ---- In Operation Asaluyeh2 Gas BOO 1000 350 ---- In Operation Ferdos Gas BOO 1000 350 ---- In Operation Kahnuj2 Combined Cycle BOO 50 31 ---- In Operation Noshahr Combined Cycle BOO 50 31 ---- In Operation Ali Abad Gas BOO 1000 350 ---- In Operation Khoramshar Gas BOO 1500 525 ---- In Construction Genaveh Combined Cycle BOO 500 310 ---- In Construction Khoram Combined Cycle BOO 1000 620 ---- In Construction Abad Kahnuj1 Combined Cycle BOO 1000 620 ---- In Construction Islam Abad Combined Cycle BOO 500 310 ---- In Construction Yazd2 Combined Cycle BOO 500 310 ---- In Construction Isfahan2 Combined Cycle BOO 500 310 ---- In Construction III. RESEARCH METHODOLOGY 3.1. The procedure The quantitative research methodology was employed in this research. Therefore, the research methodology was considered for this study in two stages:  The first stage was a widespread literature review and interview with BOT experts to identify the success factors in BOT projects. The most significant reviewed pervious researches included [11], [6], [12], [13], [14], [7], [15], [16], [17], [8], [18]. The CSFs related to BOT projects were identified and recognized success factors with the most agreement by these researchers as a benchmark for further researches. Hence, 33 success factors were identified in BOT infrastructure projects.  The second stage was a survey questionnaire to government organizations, consultants, and concessionaires conducted to evaluate the criticality of the listed CSFs. 3.2. The survey sample The questionnaire explored some barriers that BOT power plant project encounter them. Therefore, the questionnaire was conducted with BOT participants involved in the Iranian electric power industry. For this purpose, the questionnaire was distributed to government organization, consultants, and concessionaires. A total of 142 questionnaires were distributed to BOT and BOO experts according to three above categories. They were dispersed only by the researcher, person by person, in order to help them if it is necessary. Moreover, this method of questionnaire distribution makes direct access to the respondents to ensure that the respondents realize the requirements of the questionnaire. The direct method is significant in encouraging respondent to answer the detailed questionnaire. A total of 129 questionnaires were gathered. From this number, 123 questionnaires were considered as valid questionnaires for analysis (Table II). Table II: Distributed, returned, and missing questionnaire comparison Description Quantity Percentage (%) Questionnaire distributed 142 100 Questionnaire returned 129 91 Questionnaire valid and 123 86.5 returned Missing 19 13.5 www.ijmer.com 325 | Page
  • 3. International Journal of Modern Engineering Research (IJMER) www.ijmer.com Vol.3, Issue.1, Jan-Feb. 2013 pp-324-330 ISSN: 2249-6645 The questionnaire was written in English language, but it was translated to Persian language because the study area was in Iran, and questionnaires were distributed among Iranian experts in BOT projects and also to facilitate easier reading and compatibility of understanding. The Likert scale was selected to obtain weight of 33 success factors to BOT power plant project in Iran. In this type of question, the respondents answer based on the amount of importance where 1 represented “not important”, 2 “less important”, 3 “important”, and 4 “most important”. 3.3. Data Analysis The respondents are grouped into their position in organization or company including Managing Director, Project Manager, Technical Manager, Financial Manager, Planning Manager, and Junior Manager. These questionnaires’ results are considered as reliable and valid, since the majority of the respondents were in positions of senior or middle manager. Table III illustrates the position of respondents in their organization or company. Table III: Position of respondents in their organization/company Managing Project Technical Financial Planning Junior Total Director Manager Manager Manager Manager Manager Public Sector ------ 18 3 ----- 6 15 42 Concessionaires ------ 15 3 6 6 18 48 Consultants 3 15 6 ----- 6 3 33 Total 3 48 12 6 18 36 123 On the other hand, these questionnaires’ results are considered as reliable and valid in terms of their academic qualification. It means that 49 percent (60 people) of respondents approximately possess the Bachelor Degree and 51 percent (63 people) possess the Master Degree. Figure 1 shows number of respondents’ academic qualification in three categories. Figure1. Academic qualification of respondents In order to increase the reliability and validity of data collection, all respondents were selected through experts who had experience in BOT infrastructure projects in Iran. In public organization, 15 respondents have 6-10 years experience in BOT power plant projects and 9 respondents have less than 6 years experience in this field. It means that 78.5 percent of the respondents have more than 6 years experience in BOT projects. Moreover, in concessioners, 33 respondents have 6-10 years experience in BOT power plant projects and 12 respondents have less than 6 years experience in this field. It clearly seems that the majority of respondents (75%) have experience in BOT project more than 6 years. Finally, in consultants’ category, around half of the respondents (45.5%) have more than 6 years experience in BOT power plant projects in Iran. Therefore, it corroborates to obtain high-quality data to ensure regarding the reliability and validity of data collection. Figure 2 illustrates the experience of respondents in BOT infrastructure projects. www.ijmer.com 326 | Page
  • 4. International Journal of Modern Engineering Research (IJMER) www.ijmer.com Vol.3, Issue.1, Jan-Feb. 2013 pp-324-330 ISSN: 2249-6645 35 30 25 5 years 20 6-10 years 15 11-15 years 10 16-20 years 5 0 Public Concessionaires Consultants Organization Figure2. Experience of respondents in BOT infrastructure projects On the other hand, in public organization, 15 respondents have collaborated in 2-5 BOT power plant projects, 9 respondents in 6-10 projects and also 12 respondents in more than 11 projects. It means that 85 percent of respondents have cooperated in more than 2 BOT power plant projects. In concessionaires’ category, 18 respondents have been involved only one BOT power plant projects, 27 respondents in 2-5 projects, and 3 respondents in 6-10 projects. Therefore, this refers to 62.5 percent cooperation of the respondents in more than 2 BOT power plant projects. Furthermore, in consultants’ category, 21 respondents have worked in 2-5 BOT power plant projects, 3 respondents in 6-10 projects, and 3 respondents in more than 11 projects. This implies to 82 percent collaboration of the respondents in more than 2 BOT power plant projects. Finally, it is concluded that the majority of the respondents (75%) have totally been involved in more than 2 BOT power plant projects. The respondents’ participation in BOT infrastructure projects in Iran is indicated in Figure 3. 30 25 20 1 project 15 2-5 projects 10 6-10 projects 5 11 or above projects 0 Figure3. Respondents’ participation in BOT projects The method utilized in this research was one-way ANOVA data analysis. This method is used where we have one independent variable whit three or more levels (groups) and one dependent continuous variable. As mentioned earlier, there are three categories of the respondents including government organization, concessionaires, and consultants. This method of analysis is also utilized to show the differences or similarities of their comments. IV. FINDING AND DISCUSSION Thirty three success factors have been considered to recognize respondents’ ideas in these three classifications including consultants (33 persons), the government organization (42 persons), and concessionaires (48 persons). The mean scores of assigned by consultants to Appropriate project identification, Stable political situation, Favorable legislation regulation, and Well-organized and committed public agency are greater than 3.50. This indicates that these three factors are www.ijmer.com 327 | Page
  • 5. International Journal of Modern Engineering Research (IJMER) www.ijmer.com Vol.3, Issue.1, Jan-Feb. 2013 pp-324-330 ISSN: 2249-6645 the most important factors in view of consultants (Table IV). On the other hand, the mean scores of twenty nine sub-factors have been considered between 2.50 to 3.50. These sub-factors comprise of Favorable project management, Attractive financial package, Reasonable risk allocation, Government support, Commitment and responsibility of public and private sectors, Competitive and transparent procurement process, Experience with BOT project by public sector, Utilize local company in project company, Technology transfer, and Concrete concession agreement, Select suitable consortium, Overhauling guarantees, Sound environment impact, Training local staff, A multidisciplinary and multinational team, Short concession period, Good relationship with government, Public safety, Social support, Profit sharing with government, Special guarantees by the government, Select suitable subcontractor, Standardization of engineering contract, Multilateral investment guarantees agency insurance, Technical solution advance, Quality control and supervision, Capability to lead project by government, Operation in good condition, and Financial market availability. This refers to the significance of these 29 success factors in view of consultants. Therefore, in their viewpoint, all thirty three success factors are regarded as important or the most important factors because their mean scores are greater than 2.50. Moreover, in government organization, the success factor of Attractive financial package has the highest mean score (3.67) and is considered as the most important through all thirty three sub-factors. This is followed by Stable political situation (score of 3.64), Favorable legislation regulation (score of 3.62), Reasonable risk allocation (score of 3.59), and Favorable project management (score of 3.51) by considering of mean score more than 3.50. Furthermore, the mean scores of twenty eight factors have been considered between 2.50 to 3.50. These factors comprise of Appropriate project identification, Technical solution advance, Technology transfer, Utilize local company in project company, Reasonable risk allocation, Commitment & responsibility of public & private sectors, Concrete concession agreement, Select suitable consortium, Government support, Overhauling guarantees, Profit sharing with government, Good relationship with government , Training local staff, Quality control and supervision, Sound environment impact, Select suitable subcontractor, A multidisciplinary and multinational team, Standardization of engineering contract, Short concession period, Competitive & transparent procurement process, Public safety, Experience with BOT project by public sector, Multilateral investment guarantees agency insurance, Capability to lead project by government, Special guarantees by the government , Well- organized & committed public agency, Operation in good condition, Social support, and Financial market availability. This implies that these 28 aforementioned success factors are important in view of government organization. Therefore, in their viewpoint, all thirty three critical success sub-factors are also regarded as important or the most important factors because of their mean scores greater than 2.50. Furthermore, in category of concessionaires, the success factors of Capability to lead project by government has the highest mean score (3.63) and is considered the most important through of all thirty three sub-factors. The mean scores assigned to Stable political situation, Favorable legislation regulation, and Appropriate project identification are greater than 3.50. In other words, this indicates the importance of these three factors through others in concessionaires’ viewpoint. Moreover, the mean scores of twenty nine factors consist of Experience with BOT project by public sector, Competitive and transparent procurement process, Special guarantees by the government, Commitment and responsibility of public and private sectors, Social support, Utilize local company in project company, Government support, Concrete concession agreement, Select suitable consortium, Technology transfer, Standardization of engineering contract, Good relationship with government, Favorable project management , Profit sharing with government, Technical solution advance, Sound environment impact, Quality control and supervision, Training local staff, A multidisciplinary and multinational team, Public safety, Reasonable risk allocation, Select suitable subcontractor, Overhauling guarantees, Attractive financial package, Multilateral investment guarantees agency insurance, Well-organized & committed public agency, Short concession period, Operation in good condition, and Financial market availability have been considered between 2.50 to 3.50. This implies that these 29 success factors are important in view of concessionaires. Therefore, because of the mean scores of all 33 success factors greater than 2.50, they are concerned as important or the most important factors in view of the concessionaires. In Table IV, from the analysis, it is concluded that the most important sub-factors (rank 1) in viewpoint of three categories respondents are Appropriate project identification” for consultants, Attractive financial package for a government organization, and Capability to lead the project by government for concessionaires. Appropriate project identification is the most important success factors in project procurement system in consultants’ view because it needs to utilize especial experts in BOT projects by the government. While, government organization respondents pointed to the attractive financial package as the most significant factors in BOT projects because they have concentrated on the best financial proposal by concessionaires to solve their limited budget. In contrast, concessionaires noticed to the government’s ability to lead projects because it is more important to success the infrastructure projects in their viewpoint. The least important factor (rank 33) belongs to Financial market availability for all three classifications of the respondents. In other words, all respondents believe that financial market availability does not play significant role as the success factor in BOT infrastructure projects. Eventually, although there are some differences in rank, the mean scores are very close and more than 2.50. Hence, all 33 success factors are considered as important factors in BOT infrastructure projects. There is no important difference between consultants, government organization, and concessionaires in respect of the success factors in BOT infrastructure projects according to the statistical results (significance) because significant indexes are more than 0.05 [19]. www.ijmer.com 328 | Page
  • 6. International Journal of Modern Engineering Research (IJMER) www.ijmer.com Vol.3, Issue.1, Jan-Feb. 2013 pp-324-330 ISSN: 2249-6645 Table IV: Views of consultants, government organization, and concessionaires about success factors in BOT projects Consultants (N=33) Government Concessionaires (N=48) Success Factors Organization (N=42) Significance Mean S.D. Rank Mean S.D. Rank Mean S.D. Rank Appropriate project 3.70 0.60 1 3.41 0.63 6 3.53 0.65 4 0.827 identification Stable political situation 3.67 0.54 2 3.64 0.58 2 3.60 0.57 2 0.887 Favorable legislation regulation 3.64 0.55 3 3.62 0.58 3 3.58 0.61 3 0.916 Well-organized & committed 3.54 0.88 4 3.02 0.87 30 3.04 0.85 30 0.776 public agency Favorable project management 3.49 0.51 5 3.51 0.55 5 3.19 0.58 18 0.850 Attractive financial package 3.47 0.69 6 3.67 0.49 1 3.06 0.73 28 0.900 Reasonable risk allocation 3.44 0.71 7 3.59 0.75 4 3.13 0.76 24 0.767 Government support 3.42 0.78 8 3.26 0.73 13 3.31 0.72 10 0.834 Commitment & responsibility of 3.40 0.61 9 3.31 0.64 10 3.33 0.60 8 0.835 public & private sectors Competitive & transparent 3.38 0.70 10 3.07 0.71 24 3.39 0.71 6 0.952 procurement process Experience with BOT project by 3.35 0.77 11 3.07 0.78 26 3.41 0.80 5 0.787 public sector Utilize local company in project 3.30 0.68 12 3.33 0.69 9 3.31 0.70 9 0.980 company Concrete concession agreement 3.27 0.67 14 3.31 0.68 11 3.29 0.68 12 0.973 Technology transfer 3.27 0.63 13 3.36 0.66 8 3.25 0.67 14 0.774 Select suitable consortium 3.24 0.66 15 3.29 0.67 12 3.27 0.68 13 0.962 Overhauling guarantees 3.22 0.61 16 3.23 0.63 14 3.11 0.65 27 0.947 Sound environment impact 3.21 0.60 17 3.14 0.68 19 3.17 0.69 19 0.904 Good relationship with 3.18 0.77 21 3.19 0.74 16 3.20 0.74 16 0.987 government Short concession period 3.18 0.73 20 3.10 0.69 23 2.96 0.77 31 0.384 Training local staff 3.18 0.58 18 3.17 0.62 17 3.15 0.68 21 0.968 A multidisciplinary and 3.18 0.58 19 3.12 0.67 21 3.15 0.68 22 0.918 multinational team Public safety 3.15 0.67 22 3.07 0.75 25 3.13 0.70 25 0.880 Social support 3.13 0.70 23 2.71 0.67 32 3.31 0.65 11 0.853 Special guarantees by the 3.12 0.70 25 3.02 0.72 29 3.36 0.74 7 0.838 government Profit sharing with government 3.12 0.60 24 3.19 0.64 15 3.19 0.64 17 0.869 Select suitable subcontractor 3.11 0.60 26 3.12 0.62 20 3.12 0.63 26 0.980 Multilateral investment 3.10 0.77 28 3.05 0.73 27 3.04 0.77 29 0.955 guarantees agency insurance Standardization of engineering 3.10 0.53 27 3.11 0.57 22 3.24 0.61 15 0.852 contract Technical solution advance 3.09 0.58 29 3.36 0.65 7 3.17 0.63 20 0.863 Quality control and supervision 3.06 0.61 30 3.14 0.65 18 3.15 0.65 23 0.812 Capability to lead project by 3.00 0.75 31 3.05 0.82 28 3.63 0.77 1 0.915 government Operation in good condition 2.91 0.88 32 2.83 0.88 31 2.79 0.90 32 0.842 Financial market availability 2.79 0.86 33 2.57 0.89 33 2.66 0.90 33 0.259 www.ijmer.com 329 | Page
  • 7. International Journal of Modern Engineering Research (IJMER) www.ijmer.com Vol.3, Issue.1, Jan-Feb. 2013 pp-324-330 ISSN: 2249-6645 V. CONCLUSION BOT approach has a key role in rapid development of Iranian electric power industry to provide energy for massive demand in economic growth. According to extensive literature review, this research establishes success factors for BOT power plant project in Iran comprise of 33 factors. In This study, 123 valid questionnaires were received from the respondents including government organization, consultants, and concessionaires. These questionnaires’ results are considered as reliable and valid since the majority of the respondents were in positions of senior or middle manager. Moreover, majority of the respondents had BOT experience more than 6 years in government organization and concessionaires. From the analysis, the mean scores of assigned by consultants to Appropriate project identification, Stable political situation, Favorable legislation regulation, and Well-organized & committed public agency are greater than 3.50. This indicates that these three factors are the most important factors in view of the consultants. For government organization, the success factor of Attractive financial package has the highest mean score (3.67) and is considered the most important through all thirty three sub-factors. Capability to lead the project by government with highest mean scores (3.63) is considered as the most important factors through all 33 success factors by concessionaires. The assigned mean scores to Stable political situation, Favorable legislation regulation, and Appropriate project identification are greater than 3.50. Despite the difference in ranking, the mean scores are very close and more than 2.50. Therefore, the respondents believe that all thirty three success factors are important in BOT infrastructure projects. There are no significant differences between consultants, government organization, and concessionaires in respect of the success factors in BOT power plant projects in Iran. REFERENCES [1] Toan. T.N., Ozawa. K. (2007). Evaluation of procurement systems for BOT infrastructure projects in Asian countries. Universit y of Tokyo. [2] Ahadzi, M. and Bowles, G. (2004). Public-private partnerships and contract negotiations: an empirical study. Construction Management and Economics. 22(November), 967-78. [3] Chen, M.S., Lu, H.F., Lin, H.W. (2006). Are the nonprofit organizations suitable to engage in BOT or BLT scheme? A feasible analysis for the relationship of private and nonprofit sectors. International Journal of Project Management. 24 (6), 244-252. [4] Zhang. X.Q., Kumaraswamy. M.M., (2001). BOT-based approaches to infrastructure development in China. 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(2006), Critical success factors for PP/PFI projects in the UK construction industry: a factor analysis approach. [16] El-Gohary, N. M., Osman, H., and El-Diraby, T. E. (2006). Stakeholder management for public private partnerships. International Journal of Project Management. 24, 595–604. [17] Chen, C. and Doloi, H. (2008). BOT application in China: Driving and impeding factors. International Journal of Project Management. 26, 388-398. [18] Chan, A.P.C. Lam, P.T.I. Chan, D.W.M. Cheung, E. Ke, y. (2010). Critical Success Factors for PPPs in Infrastructure Developments: Chinese Perspective. Journal of Construction Engineering and Management. 136 (5), 484-494. [19] Pallant, J. (2007). SPSS Survival Manual (third edition). Mc Graw Hill. New York. www.ijmer.com 330 | Page