Risk Management of Bot Projects in Southeast Asian Countries

Over the past decades, the economic growth of some Southeast Asian countries has placed an unprecedented demand on their existing infrastructure. At the beginning of this decade, most governments started to realize that the inadequate infrastructure in this region would suffocate their economic growth. However, governments in these countries experienced strain on their financial spending; a large portion of which has been spent on social welfare for fulfilling the rising quality of life and the development of democracy in the region. The BOT arrangement in infrastructure development has suddenly become a solution for which most governments made a dash. However, some unsuccessful BOT projects tell us that BOT is not a sure win business. It involves three different levels of risk: technical, financial, and political. Amongst which, technical is the most easy to manage; financial, although a bit harder, is still manageable; political is really the most difficult risk element to handle. The BOT franchisees must properly manage all these three risk elements to avoid burning their fingers in the developments. This paper presents the risk elements in most BOT projects in the region and suggests ways to produce a win-win strategy in completing the projects.