Abstract
The potential growth of economic of a country is influenced by availability of public infrastructure. Private participation in the provision of public fascilities is essensial due to the lack of public financial resources. Build-Operate-Transfer (BOT) has been a focus of the Government in privatizing those fascilities. Under this scheme, risks are transfered in part from principal side to the investor’s. The BOT shares mutual benefits in respect to the decrease of the investment. On the other hand, investor have to deal with the risk of project failure or miscalculation of financial projections. Therefore, comprehensive knowledge and skill in managing risks is needed in the implementation of BOT projects.
This research aims to bring recommendations toward successful BOT implementation in Indonesia by developing risk management analytical framework. A survey through questionnaires and structure interview is targeted at experienced officials from public and private sector organizations, to elicit industry opinions and implementations of risk management. These will be combined with literature review in the area of corporate and project finance theories, to develop a framework of risk management which involves risk identification, risk analysis and risk response. This framework will also shows the quantification of each risk identified and the relation between risks and return. Comparison between literature review and implementation of risk management will be conducted to evaluate the implementation of BOT project and recommends for further improvement.
"Risk Management : A Case study in Indonesia’s BOT Project"
Andi Nusa Patria and M. Agung Wibowo
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The potential growth of economic of a country is influenced by availability of public infrastructure. Private participation in the provision of public fascilities is essensial due to the lack of public financial resources. Build-Operate-Transfer (BOT) has been a focus of the Government in privatizing those fascilities. Under this scheme, risks are transfered in part from principal side to the investor’s. The BOT shares mutual benefits in respect to the decrease of the investment. On the other hand, investor have to deal with the risk of project failure or miscalculation of financial projections. Therefore, comprehensive knowledge and skill in managing risks is needed in the implementation of BOT projects.
This research aims to bring recommendations toward successful BOT implementation in Indonesia by developing risk management analytical framework. A survey through questionnaires and structure interview is targeted at experienced officials from public and private sector organizations, to elicit industry opinions and implementations of risk management. These will be combined with literature review in the area of corporate and project finance theories, to develop a framework of risk management which involves risk identification, risk analysis and risk response. This framework will also shows the quantification of each risk identified and the relation between risks and return. Comparison between literature review and implementation of risk management will be conducted to evaluate the implementation of BOT project and recommends for further improvement.
"Risk Management : A Case study in Indonesia’s BOT Project"
Andi Nusa Patria and M. Agung Wibowo
Download
