Critical success factors of build-operate-transfer

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In this chapter, the author will conclude all that has been done in this research. The critical success factors were determined through the structured interview. The suitability of the factors to be used in future local BOT scheme is discussed based on the case study. Eventually, the objectives of the study were achieved. There are some recommendations for the future study would also be discussed in this chapter.

6.1 Concluding Statement

The aim of this dissertation is to identify the critical success factors to establish critical success factor framework for Malaysia BOT scheme. The research was conducted via study on North-South Expressway project to find out its success factor. The project is the largest expressway implementing BOT schemes which is lauded as a successful project. This dissertation is also to find out the role of public and private sector in delivering this project.

Critical Success Factors of Build-Operate-Transfer:

Case Study on North-South Expressway (NSE)

The author had done a research for a case study by conducting interviews with several professional from different field that involved in North-South Expressway as a practical example in order to achieve the objectives. A direct relationship between the dependent variables and independent variables (critical success factors) is identified. Independent variables have a postulated influence over the dependent variables. In this regard, the smooth flow of dependent variables will assure the BOT success.

     Project financing has become a vital tool in spurring the economic growth of the nation by inspiring the infrastructure development. The privatization of the infrastructure could result in the generation of multiplier effects where country has led in the sense of the growth of construction industry currently. The development of North-South Expressway has reduced travel time, hence, stimulating the state development. Process of privatization depends on the economy pragmatism rather than ideological consideration. Despite a challenging operating environment aggravated by global financial meltdown, instead, investor is capable to made strong stride forward and flourish in delivering competitive infrastructure.

     In order to derive an overview on the overall success of North-South Expressway (NSE), it is useful to conclude by integrating perspectives of all interviewees on success factors in North-South Expressway project. NSE project is studied in detail so as to provide confirmation to the findings. These identified critical success factors are much like a formula of BOT. The formula would guide and assist parties to analyze and simplified the complicated unknowns in the BOT project that contributes to success. The framework reflects the characteristic and importance of critical success factors that help a BOT project to remain competitive.

     The first objective of this dissertation was achieved through research process of extensive literature review related to BOT scheme. The fundamental of BOT project in delivering infrastructure facility to fill the knowledge gaps of participants as BOT may not be well understood as it has a relatively short history.

     Firstly, an appropriate project identification and stable political and economic situation are successful key factors to a successful preliminary evaluation phase. Greater appropriate identification and stable political and economic situation has higher possibility of better outcome of BOT project by setting a good starting at the outset. Winning of BOT contracts depend on attractive financial package, acceptable toll/tariff levels and reasonable allocation. These components would create a competitive tendering system that expected to open up the opportunities of better technology solution.

     Next, selecting a suitable subcontractor will ensure a successful construction phase. Whereby, a multidisciplinary subcontractor will give production with quality control and supervision to certain extent. A management control is necessary for a successful operation phase in order to proceed to next successful transfer phase with another crucial technology transfer as success factor. Though, both management control and technology transfer do not seem crucial for host government A, they appeared to be critical to safeguard and add value to the desire result of smooth transfer of facility.

     There is a close relationship between the measurements of success of a BOT project and the critical success factors. All respondents are agreed that the management control and technology transfer are factors which critical to a BOT project. However, these two factors does not really seem critical to him. This can be seen from their measurement of a project success is where project been properly delivered. Therefore, new method of management control and technology transfer will add risk to the BOT project that make it do not seem critical from the standpoint of government. On the contrary, as customer satisfaction is the priority for the concessionaire B. They are looking at the innovation in terms of management control and new technology to raise the customer satisfaction. Hence, the relationship between measurements of project affects the acceptability of the critical success factors.

     Finally, a framework for evaluating the critical success factors to implement in Malaysia's future BOT project is proposed. The author hopes that this framework will guide various parties succeed in implementing BOT project to demonstrate a good future. The chances of having smooth and profitable BOT project will be increase. Thus, second objective of this research is achieved.

     BOT scheme is an important vehicle for attracting foreign capital that should be encouraging to widen the infrastructure shortages and reduce massive public expenditure of government with the proactive participation of private sector. Yet, the success of North-South Expressway has been contributing its strategic importance to the holistic infrastructure development and become an impetus to the market. It is doubtless that a decent level of infrastructure service level helps a lot in determining the success of current Malaysia. The pioneering experience of Malaysia's BOT in the critical sector of privatization has been closely assessed by vicinity countries.

6.2 Limitation of Study

     The primary data of this dissertation conducted by the author is based on one case study with personal interviews with experts involved in this project. The findings was able to be done with several domain experts who involved in the North-South Expressway, perhaps the result will be more accurate by interviewing multiple professionals. Time factor is the main problem that has been come across by the author due to time-consuming procedure. The author also faces limited commendable project that have been implemented by BOT scheme in studying the evaluation of critical success factors. The sample is so small that it does not represent the overall result in the industry. Hence, the identified critical success factors may not suit to all BOT project in the construction industry.

6.3 Recommendation for Future Research

BOT delivery method could have broader application in Malaysia rather than just as an alternative finance strategy. It could be addresses the shortage of infrastructure facility and enhance the poor performance of public enterprises. It is crucial to examine the Malaysia successful BOT project to strive forward and improve the performance from time to time.

For the future study, there are some important additional recommendations:

  1. A proactive body is required to prevent unsound toll collections.
  2. Increase the transparency level of BOT scheme in or to achieve "level playing field where bidders are having an equally opportunities and applies common limitation in order to promote competitive atmosphere in the industry.
  3. Government should act as a media between public and concessionaire via a proper communication channel with public.
  4. Codifying and benchmarking the body of experience of BOT-type to establish firm basic guidelines.
  5. Incorporate the Output & Performance Based Contract (OPBC) into the BOT contract ensuring the Key Performance Indicators (KPIs)