Svetlana Drljaca

IMPLEMENTATION OF BOT MODEL TO DEVELOPMENT OF TRAFFIC INFRASTARCTURE PROJECTS

Summary

            The aim of this article to present the BOT model of financing as an economic sustainable, efficient and feasible way to finance capital intensive projects, such as development of traffic infrastructure, in the light of the current world economic crisis. The first part of this article gives a general view of the BOT model and the second compares it with concessions as its essential part through the example of highway development project. The focus in the third is on the key phases of the BOT model, the fourth profitabilty evaluation and and fifth is on the critical factors of success with this kind of projects. The last part shows benefits of the BOT Model in comparison with the classic increase in public debt through the examples of countries in the region. At the end, the crucial traffic infrastructure project „Tunnel under La Manche or Eurotunnel“ is presented, which could not have been developed without the implementation of the BOT Model. In conclusion, alternative sources of financing capital intensive projects, such as state budget or increase in state indebtedness, are not a good choice, becuase the state is unefficient in project organization, cost control and project utilization and is highly exposed to corruption. In addition, the world economic crisis has pushed up developing countries to cope with public deficit the increase of which may have negative impact on the countrry’s macroeconimic stability.

Key words: concession, BOT model, traffic infrastacture, creditors,  project financing.