All You Need to Know About BLT (Build Lease Transfer) Project Delivery Method

Published on 09th June 2023

Build Lease Transfer (BLT) is a project delivery and procurement model primarily used in the infrastructure sector. In this method, a private developer takes on the responsibility of designing, constructing, and financing a project on behalf of a client. The client is generally a public entity, but sometimes even a private organization may resort to the BLT project delivery method. 


Once the construction is complete the contractor leases the facility to the client (public entity) for a specific period of time. This period is known as the concession period. At the end of this concession period, the ownership is transferred to the client.


This blog explains everything you need to know about the BLT method.


What is BLT method?

BLT stands for Build Lease Transfer. As the name suggests, it is a project delivery method wherein the contractor is responsible for designing, building as well as financing the project as per the build lease transfer agreement. Generally, public entities use this method to build public infrastructure and utility projects without risking public money. However, even a private company may also choose to build its facility through this project delivery method.


During the lease period, the entity that contracts the projects has no ownership rights. Once the lease period or concession period is over and the contractor recovers its capital, it transfers the ownership to the project owner.


In contrast to the Build Operate Transfer or BOT delivery method, the contracting firm or EPC company developing the project does not involve in the operation of the facility before transferring the ownership. 


Recently, the BLT method has gained popularity in both the private and public sectors due to its advantage of not risking huge capital upfront in designing and building facilities.


Also Read: All You Need to Know About DBB (Design Bid Build) Project


Why is BLT popular?

The use of the BLT project delivery method is growing rapidly. Since 2019, the BLT market has been growing at a CAGR of 6.5%. This growth of the BLT market is being driven by the following factors.

  • The need for governments to invest in infrastructure
  • The increasing cost of infrastructure projects
  • The growing availability of private capital
  • The increasing complexity of infrastructure projects


How does BLT work?

Project Initiation and Planning

  • The client (public or private entity) identifies the need for a project, such as a new building or infrastructure development.
  • The client assesses its requirements, budget, and desired project outcomes.
  • The client conducts market research and identifies potential developers who specialize in BLT projects.
  • The client and developer initiate discussions to outline the project scope, objectives, and contractual terms.


Design and Engineering

  • The developer collaborates with the client to understand their specific needs and preferences for the project.
  • The developer engages architects, engineers, and other design professionals to develop detailed plans, drawings, and specifications.
  • The design phase includes obtaining necessary permits, approvals, and compliance with local regulations and building codes.



  • The developer takes responsibility for overseeing the construction process.
  • The developer hires contractors, subcontractors, and suppliers to execute the construction activities.
  • The construction phase involves site preparation, foundation work, structural assembly, installation of utilities, interior finishes, and landscaping.
  • The developer ensures quality control, adherence to timelines, and compliance with safety standards throughout the construction process.


Lease Agreement

  • Once the project construction is complete, the developer enters into a lease agreement with the client.
  • The lease agreement outlines the terms and conditions of the lease, including the lease duration, rent or concession payments, and maintenance responsibilities.
  • The lease agreement may also specify any tenant improvements or customization requirements.


Occupancy and Lease Period

  • The client takes possession of the completed project and begins occupying and utilizing the facility.
  • The client pays rent or concession payments to the developer as per the lease agreement.
  • During the lease period, the client is responsible for maintaining and operating the facility, unless otherwise specified in the agreement.


Ownership Transfer

  • At the end of the lease term, the ownership of the project is transferred from the developer to the client.
  • The transfer of ownership is typically pre-determined in the lease agreement, and no additional cost is usually involved.
  • The client assumes full ownership and control of the facility or asset, enabling them to continue using and managing it as they see fit.


Advantages of BLT Method

Cost Efficiency

BLT can reduce upfront costs for the client since the developer assumes the financial responsibility for construction and financing. The client avoids the need for significant capital investment, allowing resources to be allocated to other business priorities.


Time Savings

BLT projects can be completed more efficiently compared to traditional delivery methods. The developer's expertise in design and construction, along with their single-source responsibility, streamlines coordination and minimizes delays.


Customization and Flexibility

BLT allows the client to work closely with the developer to customize the facility according to their specific needs and requirements. The design and construction process can be tailored to align with the client's operational goals, resulting in a bespoke solution.


Risk Mitigation

The developer assumes responsibility for construction, maintenance, and facility management during the lease period, reducing risks for the client. The client can focus on core business activities while relying on the expertise of the developer.


Also Read: All You Need to Know About Design Build Delivery Method


Disadvantages of Build Lease Transfer (BLT)

Potential Higher Lease Costs

The client may incur higher lease costs compared to traditional financing methods due to the inclusion of the developer's profit margins and financing charges. The long-term financial implications of the lease agreement should be carefully evaluated.


Limited Control During the Lease Period

While the client benefits from the facility during the lease period, they have limited control over the property compared to full ownership. Modifications or major changes may require the developer's approval, potentially limiting flexibility.


Dependency on Developer Performance

The success of the BLT project is heavily reliant on the developer's competence, reliability, and financial stability. If the developer encounters financial or operational difficulties during the lease period, it may impact the client's operations and long-term plans.


Potential Disruption upon Lease Termination

At the end of the lease term, there may be a disruption in the client's operations when the ownership is transferred. The client needs to plan for the transition and ensure a smooth handover to avoid interruptions in business activities.


Also Read: Construction Dispute Resolution: A Brief Guide


Use of BLT in various sectors

BLT is used in a variety of sectors within the construction and infrastructure industry, including:

  • Transportation: BLT has been used to build roads, bridges, tunnels, and other transportation infrastructure. For example, the BLT model was used to build the Channel Tunnel between England and France.
  • Energy: BLT has been used to build power plants, wind farms, and other energy infrastructure. For example, the BLT model was used to build the Hinkley Point C nuclear power station in the UK.
  • Water: BLT has been used to build water treatment plants, dams, and other water infrastructure. For example, the BLT model was used to build the Three Gorges Dam in China.
  • Wastewater: BLT has been used to build wastewater treatment plants and other wastewater infrastructure. For example, the BLT model was used to build the Thames Tideway Tunnel in London.



BLT is a procurement model that can offer a number of benefits to both public sector entities and private sector entities. It can help to reduce costs, improve quality, and accelerate the delivery of infrastructure projects. As the global market for BLT projects continues to grow, it is likely that this procurement model will become increasingly popular.


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