“Risks in Build Operate Transfer (BOT) Infrastructure Project: A Case Study on Shirwal-Lonand-Phaltan-Baramati Road Project”

The construction industry in India is expected to be worth Rs 120 billion per year; the sector caters to the requirements of billions of people and contributes 5.5% to the country’s GDP. However construction industry continues to face challenges around skill deficiency, escalation in material and labour expenses, and socioeconomic changes. The main intent of this research study is to focus on the India construction transportation sector with an emphasis on multiple project risk factors. The progress of the construction sector in India has been comparatively slow compared with the industrial and manufacturing sectors. The Build-Operate-Transfer (BOT) scheme is now becoming one of the usual ways for construction development in India to meet the needs of India’s forthcoming economic growth and development. There are great opportunities for overseas investors to finance in India. However, undertaking construction venture in India, involves many risks and difficulties that are due primarily to variances in legal systems, market situation and culture. It is vital for overseas investors to recognize and manage the critical risks linked with investments in India’s BOT schemes. Based on the review, the following critical risks are recognized: 1) delay in approval, 2) change in law, 3) cost overrun, 4) dispatch constraint, 5) land acquisition and compensation, 6) enforceability of contracts, 7) construction schedule, 8) financial closing, 9) tariff adjustment, and 10) environmental risk. The methods for mitigating each of these risks are also discussed the factors responsible for time overruns for traditional and BOT projects are identified through a survey. The relative importance and significance of these factors are investigated. Purpose of this paper is to investigate the risks associated with Build Operate Transfer (BOT) schemes in India