DBFO

DBFO stands for Design-Build-Finance-Operate, a procurement model used in public-private partnerships to deliver infrastructure projects. In a DBFO contract, a private consortium is responsible for designing, constructing, financing, and operating a facility under a long-term concession, while ownership of the asset typically remains with the public sector. The private partner recovers its investment and earns a return through government payments, user charges, or a combination, over the contract term, commonly 20 to 30 years.

The contract typically involves competitive bidding and specifies performance-based standards for design quality, construction timeliness, and ongoing operation and maintenance. Financial arrangements blend private capital with public payments, such as availability payments for meeting service levels, and may include tolls or other charges to manage demand. At the end of the concession period, ownership and control revert to the public sector, subject to agreed handback requirements.

Proponents argue that DBFO can deliver faster project delivery, transfer lifecycle and maintenance risks to the private sector, and leverage private capital without immediate public budget outlays. Critics contend that long-term costs can be higher, risks may be misallocated, and contract complexity can reduce transparency and public oversight. The effectiveness of DBFO depends on clear risk allocation, robust performance criteria, and strong governance to prevent renegotiation and ensure value for money.

DBFO has been used in various regions, notably in the United Kingdom’s public-private partnership programs and in other Commonwealth countries, as well as in several other markets. See also: public-private partnership, concession.