What is the Build-Own-Operate (BOO) Model?
The BOO model delivers needed infrastructure with no up-front investment
As public and private entities in developing countries adopt modern water and wastewater treatment — and those in developed countries deal with the need to replace legacy infrastructure — they often face the same dilemma: how to pay for it.
The build-own-operate (BOO) contract is a project delivery model frequently used for large, complex public-private partnership (PPP) infrastructure projects. In a typical BOO project, a government department allows a private company to finance, build, and operate infrastructure over a specified period, and the private company retains ownership of the infrastructure in perpetuity.
While the public partner might offer some encouragement, perhaps in the form of limited funding or tax exemptions, the private sector partner shoulders most of the risk. Where there is an established demand history, however, market risk may be lower.
Compared to the similar build-own-operate-transfer (BOOT) model, in which ownership of the infrastructure eventually reverts to the public partner, the BOO model is a step closer to privatization. It’s a way for an entity to deliver needed infrastructure with private capital while freeing it to focus on its other pressing missions.
How is BOO Used?
The BOO model is well-suited for high-dollar projects with operations that require specialized expertise. It is currently popular in the power and transport sectors. Notable BOO projects include India’s Kutch and Pipavav Railways, China’s Xiamen Airport Cargo Terminal, Thailand’s Sukhothai Airport, China’s Wuhan Yangluo Container Port, and Indonesia’s Balikapapan Coal Terminal.
It also is used for toll-road projects, and recently has been gaining popularity in the water sector. Wastewater treatment, water reuse, and desalination all require a great deal of specialized know-how and equipment. BOOT agreements may go on for decades, and when it’s time to transfer infrastructure back to a government department after 40 years, the department may not be looking forward to the expense and headache of searching for a qualified workforce and attending to operational details.
With a BOO structure, water is provided as a service by a specialized company that is essentially a concessioner. The public partner buys only the water with no infrastructure investment, potentially lowering water cycle costs by as much as 30%.
Fluence’s Water Management Services help finance, construct, and operate infrastructure with custom, full-water-cycle solutions under long-term BOO agreements.
Fluence BOO agreements are ideal for PPPs, and they can deliver the same on-site water and wastewater treatment to private ventures, including:
- Hotels and resorts
- Camping, glamping, and RV parks
- Remote workforce housing sites
- Industrial parks
- Property developments
- Schools and stadiums
How Can Fluence Help?
Contact the experts at Fluence to discuss how our Water Management Services can reliably deliver the water you need right now with no up-front infrastructure investment.
Fluence solutions include top-quality modular water and wastewater treatment plants with proven technologies for sustainable, reliable operations on the smallest physical footprint in the business.