Commentary: Leyte optimization geothermal plants showcase successful BOT projects
Tacloban City (September 24) -- The Leyte Optimization Geothermal Power Plants are renewable energy projects which are very good showcases of successful undertakings through the Build-Operate-Transfer Scheme.
The Build-operate-and-transfer (BOT) Scheme is a contractual arrangement whereby the project proponent undertakes the construction, including financing, of a given infrastructure facility, and the operation and maintenance thereof.
A key characteristic of BOT is private financing. In BOT, the government subcontracts the entire development process, including the associated risks, to the private entity.
The project proponent operates the facility over a fixed term during which it is allowed to charge facility users appropriate tolls, fees, rentals, and charges not exceeding those proposed in its bid or as negotiated and incorporated in the contract to enable the project proponent to recover its investment, and operating and maintenance expenses in the project.
The project proponent transfers the facility to the government agency or local government unit concerned at the end of the fixed term that shall not exceed fifty (50) years.
This shall include a supply-and-operate situation which is a contractual arrangement whereby the supplier of equipment and machinery for a given infrastructure facility, if the interest of the Government so requires, operates the facility providing in the process technology transfer and training to Filipino nationals.
The Leyte Optimization Geothermal Power Plants were designed and operated by Ormat Leyte Co., Ltd., an affiliate of Ormat Technologies, Inc. which will be turned over or transferred to the Philippine National Oil Company Energy Development Corporation (PNOC-EDC) after ten years of consistent and excellent operations under stringent safety and environmental standards. (PIA 8) [top]