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Build-Operate-Transfer (BOT) is perceived as a risk sensitive procurement method. In a limited concession time, project sponsor (investor) is expected to achieve return on investment and profit by the end of concession period.  Theoretically, BOT investors have to manage greater scope of risks than the ones on traditional construction projects.  Various kinds of risk factors, such as public policy, economic, politic and environment issues of a country are to be considered.  The scheme is considered risk sensitive.  Akintoye (1998) suggests that a Private Finance Project (including BOT) should satisfy two fundamental requirements: secure value for money and allocate risks appropriately.

The objectives of the research are (1) to apply a system theory as a general frame work to approach the elements involved in the research area, (2) to identify the general processes within the risk management framework of BOT projects; and (3) to propose a conceptual model of risk management in BOT projects (4) to calibrate and to validate the model developed

A system theory could be used to investigate all of parties involved on such Build Operate and Transfer (BOT) projects.  A survey from public and private sector organizations which involved in BOT projects is going to be conducted and analyzed.  A conceptual model of Risk Management on BOT projects is developed through Focus Group Discussion (FGD).  The final steps are calibrated, validated and simulated the model developed.

Key words : BOT, risk management, construction, system theory and modeling

Ir. Mochamad Agung Wibowo, MM, MSc, PhD
Construction Management Division
Civil Engineering Department
Diponegoro University, Indonesia

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