More than 35 senior executives representing 23 major transnational corporations (TNCs) and two export credit agencies will participate in an international seminar on build-operate-transfer (BOT) arrangements, which will be held in Beijing, China, from 19-21 March. The seminar is jointly organized by the UNCTAD secretariat, Bank of China and the Ministry of Foreign Trade and Economic Cooperation (MOFTEC). The main purpose of the meeting is to assist the host country to upgrade its institutional capacity to identify, design, negotiate and implement BOT projects. However, it is expected that the encounter between senior Chinese officials responsible for investment decisions at both the national and municipal levels, and their counterparts in the international investor community, will help to create a vibrant long-term partnership in support of private financing of infrastructure projects in the key sectors of energy, transport and telecommunications in China.
A BOT arrangement is one where a private development consortium, usually foreign, raises the finance, builds and operates a facility (eg. a power station), and at the end of the concession period, ownership of the facility is transferred to the host government. Given the worldwide pressure for private investment in infrastructure, BOT has emerged as an acceptable alternative for mobilizing foreign private capital, especially in the context of sustained public/private partnerships. But these techniques are fraught with many complexities and challenges for governments and foreign investors alike. The Beijing seminar will explore such issues as project risks, the costs and benefits to the host country, pricing, cash flow problems and their implications for foreign investors, the legal and regulatory framework, political constraints, financial engineering, returns on investment, government guarantees, negotiation and implementation strategies.
Among the major TNCs and banks attending the seminar are ABB, Alcatel Alsthom, Electrowatt, Ericsson, Impregilo, Lurgi, Powergen International, Preussag, Sasib, Siemens, ABN AMRO Bank, Barclays Bank, Banque Indosuez, Credit Lyonnais, Credit Suisse, Deutsche Bank, The Sumitomo Bank, UBS, as well as the Swedish Export Credit Corporation, and the Swiss Export and Investment Risk Guarantee. About 150 participants from the Chinese side will come mainly from the State Planning Commission, Ministry of Finance, People´s Bank of China, State Administration for Foreign Currency, Ministry of Communications, Ministry of Water Resources, Ministry of Railways, Ministry of Telecommunications, Bank of China, and Ministry of Foreign Trade and Economic Cooperation, as well as from provincial departments and enterprises.
The seminar will be opened by Mr. Wang Xuebing, Chairman and Governor of Bank of China, followed by Mr. Roger Lawrence, Deputy to the Secretary-General of UNCTAD. The proceedings will be chaired by Mr. Zhang Debao, General Manager, The Institute of International Finance, Bank of China.