Build Operate and Transfer arrangement is increasingly becoming popular with most of the government bodies world wide. Economic slowdown has caused very less budgets for new capital expenditure. Bus Wash Equipment for the public transport segment is one such segment where the government bodies ask private partners to bid and get associated with the government.
The public transportation bus cleaning can be situated at client location or at the investor location, however, mostly it is at the clients location at the maintenance and repair depot. Here, the bus cleaning operator gets an allocated space where the operator can do the civil construction for the bus wash equipment. The equipment is installed at this location.
The remuneration can vary depending upon the government body :
1. Build Operate and Transfer : In this case, the operator operates, purchases the bus wash equipment, operates it for certain amount of time and then transfers the ownership of the equipment to government body. The public bus authority pays on per bus basis. Here the operator is responsible for maintenance of the equipment as well.
2. Build and Operate : In this case, the operator purchases the equipment, operates the equipment for a particular period of the bus washing contract. The Bus Authority may extend or terminate the contract after completion of the contract time period. If the bus washing contract is terminated, the operator is required to remove the equipment. He may install it somewhere else. The remuneration is on per bus basis.
Typically, the bus washing contract period range from 3 - 5 years.
This is a new way of business and is being adopted in many countries. As a business, it is very lucrative as the land rent, electricity and water costs are borne by the client. This is a very good business as it involves very little risk and has an assured high volume business guaranty.
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