Which of the following best describes an agreement where a private organization will provide all of the financing, technical expertise, and perhaps equipment and labor, to build an infrastructure.

1. After it is completed, the private organization will operate and manage the facility under the regulatory control of the government.

2. The private organization will collect the user fees on a for-profit basis.

3. After a certain period of time the facility will be transferred to the government.

Question

Business

Mckenna Rocha

3 May, 16:54

Which of the following best describes an agreement where a private organization will provide all of the financing, technical expertise, and perhaps equipment and labor, to build an infrastructure.

1. After it is completed, the private organization will operate and manage the facility under the regulatory control of the government.

2. The private organization will collect the user fees on a for-profit basis.

3. After a certain period of time the facility will be transferred to the government.

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Answers (1)

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Woofie · Answer 1

The correct answer is 3)

Explanation:

The question suggests that there is an agreement.

In which case, the most likely scenario is that the facility or utility being built is a public one and it cannot remain so indefinitely.

The government will most likely concede to an arrangement where the after some time (usually in years, several decades that is) the infrastructure is transferred back to it.

This type of contract is called a Build, Operate, and Transfer (BOT) Agreement. It is usually deployed when there is a partnership between a government-owned agency and a privately owned establishment (Public / Private Partnership).

This type of arrangement allows large projects to be completed using private funds e. g a Public Hospital, or a Bridge.

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