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Procurement types
- 1. Design & Build PROCUREMENT Build Operate Transfer PROCUREMENT Build Lease Transfer PROCUREMENT Build Own Operate Transfer PROCUREMENT Build Own Operate PROCUREMENT Design Build Finance Operate PROCUREMENT Turn Key PROCUREMENT
- 6. http://inceptconstruction.com/wp- content/uploads/2013/10/design_build_meth od_draft_6-1024x409.jpg
- 8. Points 1. Usually in infrastructure project & PPP 2. Parties involved: Host government, Concessionaire, Lending banks, Lenders (development banks, etc), Project Contractors. 3. Typically used to develop a discrete asset rather than a whole network 4. Generally entirely new in nature 5. Obtains revenue from fee charged to the utility/ government rather than tariffs charged to the users 6. BOT projects example: Toll road projects 7. Risk involved: a. Political risk b. Technical risk c. Financing risk 8. Example of countries that use BOT: a) Thailand b) Turkey c) Taiwan d) China e) Japan f) Malaysia g) India
- 12. Points 1. Private entity builds a complete project and lease to the government 2. O&M authority (from project owner to lessee) 3. Ownership (by shareholders) 4. After lease period, ownership of the asset & O&M responsibility transferred back to the government 5. BENEFIT for foreign company: maintains the Property Rights while avoiding Operational Risk
- 13. Build Own Operate Transfer PROCUREMENT
- 14. Points 1. Different between BOOT and BOT is that private entity owns the works 2. Why? It is to recover the costs of investment and maintenance while trying to achieve higher margin on project 3. Advantage of BOOT: a) Encourage private investment b) Inject new foreign capital to the country c) Transfer of technology and know-how d) Completing project within time frame and planned budget e) Providing additional financial source for other priority projects f) Releasing the burden on public budget for infrastructure development
- 17. Points 1. Project ownership usually remains with the project company 2. Large amounts of finance and long payback period 3. Example of projects: a) Water treatment plants – process raw water
- 18. Design Build Finance Operate PROCUREMENT
- 19. Points 1. Similar to BOOT but no actual ownership transfer 2. Contractor to assumes the risk of financing for the project plus the responsibility for maintenance and operation 3. Disadvantage: a) Difficulty with long term relationship b) Threat of possible political change 4. Responsibility of private construction company a) Design b) Construct c) Raise fund d) Reward shareholder e) Periodical payment to government (true owner) 5. Government benefited by: a) Avoided direct payment from the users b) Remain as owner but do not need to facilitate c) Avoided debt due to spread out of cost over the years
- 22. Points 1. the constructor builds an item to the buyer's exact specifications, or when an incomplete product is sold with the assumption that the buyer would complete it. 2. generally used in the sale or supply of goods or services. 3. upon receiving the product, just needs to turn the ignition key to make it operational, or that the key just needs to be turned over to the customer 4. In real estate, turnkey is defined as a home or property that is ready for occupation for its intended purpose a) a home that is fully functional, needs no upgrading or repairs 5. an client enters into a contract with one party (normally a developer or a contractor) to finish the entire project without any further input from the client. 6. the project is handed over only once it is fully operational. In effect, the developer or contractor is finishing the project and 'turning the key' over to the client. 7. Advantage: a) In a turnkey contract, the client is generally left out of the building process entirely as the developer or contractor handles all decisions and problems related to construction. b) developer or contractor normally owns the project until it is complete, and therefore it has the financial motivation to complete the job as quickly and efficiently as possible c) provides more time for a client to seek financing and investors before he/she is required to pay
- 25. Abbreviation 1. PPP: Public-Private Partnership 2. O & M: Operate and Manage 3. DCMF: Design Construct Manage Finance 4. BOT: Build Operate Transfer 5. BLT: Build Lease Transfer 6. BOOT: Build Own Operate Transfer 7. DBFO: Design Build Finance Operate 8. BOO: Build Own Operate 1. Concession: a thing that is granted, especially in response to demands; a thing conceded. 2. Procurement: action of obtaining or procuring something Glossary