Henan Wastewater Management and Water Supply Sector Project

At the beginning of project implementation, three local governments tried to adopt build-operate-transfer (BOT) modality and contracted private companies to construct the wastewater treatment plants (WWTPs). However, the local governments had inadequate capacity to conduct due diligence, and the contracted companies could not provide adequate counterpart financing. The unsuccessful introduction of BOT modality also showed that the capacity of individual WWTPs was too limited to ensure commercial viability. The BOT modality for WWTPs should have been carefully assessed during subproject appraisal. [Main text, para. 57]