In the Name of Allāh,
the Entirely Merciful, the Especially Merciful
Praise is due to Allāh, Lord of the worlds, may the blessings and peace be upon our master Muḥammad, the last of prophets, on his family, and all his companions.
Resolution No. 182 (8/19)
Application of B.O.T (Build-Operate-Transfer) Financing Method in the Development of Awqāf Properties and Public Utilities
The Council of the International Islamic Fiqh Academy of the Organization of the Islamic Conference, holding its 19th session in Sharjah, United Arab Emirates, on 1–5 Jumādā al-Ūlā 1430h (26–30 April 2009),
Having examined the research papers submitted to the Academy concern- ing the Application of B.O.T. (Build-Operate-Transfer) Financing Method in the Development of Awqāf Properties and Public Utilities,
Having listened to the discussions on the subject,
Resolves
- The B.O.T. (Build-Operate-Transfer) contract refers to an agreement between the landowner or his representative and a financer (Project Company). Based on the agreement, an enterprise is established and managed by the financier who will be entitled to its full returns (or as per arrangement agreed upon), for a specific period during which he redeems his capital investment and achieves a reasonable At the end of that period, ownership of the enterprise, in its desired operational form, is transferred to landowner.
- The B.O.T. is a new contract which although some of its forms are sim- ilar to some forms of contracting and investment instruments known in Islamic jurisprudence, does not conform to any of them.
- It is permissible to use O.T. contract in the construction of Awqāf
properties and public utilities.
Recommendation
Fiqh research has to be intensified on all forms of B.O.T. contracts in order to review their different stipulations and formulate in wording that can easily be referred to in negotiation and litigation.
Indeed, Allāh is All-Knowing.
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