RISK FACTORS ASSESSMENT OF BUILD-OPERATE-TRANSFER (BOT) PROJECTS IN NIGERIA

Abstract

The difficulties faced by governments in meeting huge infrastructure demand and improvement of service levels in many countries resulted in a shift from the conventional procurement process to a more innovative one such as the Build Operate and Transfer (BOT) involving private sector participation for the delivery of public projects. However, the use of BOT procurement has been unsuccessful in many countries due largely to poor and unsuccessful risk identification and management leading to many project failure. This study assessed through a field survey the critical risk factors of Build Operate and Transfer (BOT) projects from the perception of key stakeholders with the view to providing a useful tool for analysis and management of their potential impact on projects. Structured questionnaires were randomly distributed to government officials, concessionaire, developers and lenders in Kaduna, Abuja, Lagos and Port Harcourt where ample BOT projects have been realized in recent times. Descriptive statistics specifically, Mean Item Score (MIS) and Mean Deviation were used for analyzing the perception of the respondents. The results revealed that on the overall change in government policies, unfavourable general business condition and project company default are considered as the topmost risk factors with MIS of 4.3953, 4.2093 and 4.2093 respectively while inclement weather is considered as the least factor with MIS of 2.9535. The results further showed that for the different risk categories, political risk is ranked highest with MIS of 3.7742 while Development risk was ranked as the least risk category with MIS of 3.6349. Therefore, for effective proposals, design, construction, operation and maintenance of infrastructure development the risk factors with high impacts are to be mitigated or adequately allocated.