A project delivery mechanism in which a government entity grants to a private sector party the right to construct a project according to agreed design specifications and to operate the project for a specified time. The private sector party does not own the project. In exchange for assuming these obligations, the private sector party receives payment from the government entity or the project's end users. In some cases, the private sector party may provide some of the financing for the project. At the end of the contract period, operation of the project is transferred to the government entity.

For more information on BOTs and project delivery mechanisms generally, see Practice Note, Public Private Partnerships: Issues and Considerations.