Managing urban wastewater in China: a survey of build-operate-transfer contracts

This paper reports on a nationwide field survey of wastewater plants under build-operate-transfer ( BOT) contracts in China. The survey yielded information on contracting parties, size, duration and location of 37 BOT contracts. The key findings are that municipal governments feature as first parties to BOTs, and that many second parties are domestic rather than international entities. Municipalities favour BOT contracts because of familiarity with infrastructure BOTs and the access they offer to the capital market. A subsample of five BOT contract documents was examined. Gaps in contract specifications included clauses allocating responsibility for defects in plant design and environmental incidents, and coverage of commercial risk. Many of the BOT contracts examined qualify as public-public partnerships rather than public-private partnerships (PPPs) in the classic sense of the word. This dampens the risk of contract failure.