Build-operate-transfer projects as a hybrid mode of market entry: The case of Yavuz Sultan Selim Bridge in Istanbul
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Date
2018
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier Science Bv
Abstract
BOT (Build- Operate-Transfer) projects are well known to sponsors and contractors of mega infrastructure projects around the world. The massive scale and long-term time frame of these construction projects require non-traditional business relationships among the sponsors, prime contractors, sub-contractors, and a host of other vendors. The BOT model is typically sought by local and national governments that cannot independently finance complex mega projects. A BOT deal refers to a large-scale project where the sponsor (typically a governmental agency) contracts with a prime contractor, that assumes the responsibility for completing the construction and operating it for a predetermined period, before turning ownership back over to the sponsor. During this predetermined period, the contractor can recoup its investment through its operations and/or through a guaranteed rate of return from the sponsor. This paper reports on such a project - the case of Yavuz Sultan Selim Bridge, the third bridge linking Asia and Europe in Istanbul, a sprawling metropolis of roughly 15 million people. The bid also called for the construction of the connecting highways. It was initiated in 2012 and was completed in 2016. Named after a celebrated Ottoman Sultan, the bridge is widely acknowledged to address a much-needed infrastructure project for Istanbul. We detail BOT projects - rarely discussed in the IB literature - as a hybrid mode of international market entry, with unique features, benefits, and risks. The insights offered in this manuscript were gathered from a series of unstructured interviews with senior executives of the prime contractors.
Description
UNER, MEHMET MITHAT/0000-0002-1802-2553; Cavusgil, S. Tamer/0000-0003-1947-492X
Keywords
Build-Operate-Transfer projects, Mega projects, Infrastructure projects, Foreign market entry, Emerging markets, Global contractors, Turkey
Turkish CoHE Thesis Center URL
Citation
10
WoS Q
Q1
Scopus Q
Source
Volume
27
Issue
4
Start Page
797
End Page
802