LEGALITY OF GUARANTEE BAN CLAUSE WITHIN BUILD OPERATE TRANSFER PROJECT BY LOCAL-OWNED ENTERPRISES

Abstract

In the process of implementing development, somehow a government has not insufficient fund
to build infrastructures which have already been planned. During the process, the existence of
private parties are required to be investors which are able to fund the government’s
infrastructure plan through BOT (Build, Operate, Transfer). It is an agreement conducted by
government’s policy with the private parties which create a public policy as the object of
agreement. This study applied a normative research using statue approach and conceptual
approach. The practical implication of this study is expected to be means of consideration to
resolve the law-related problems of Build Operate Transfer (BOT), particularly concerning on
the guarantee ban done by cooperation partner. BOT is a cooperative contracts between
government and private party. The BOT contracts becomes one of the alternative contracts
which could be applied by government for developing infrastructure whose development
requires huge fund and the government has no capabiliy to fund it. Nevertheless, the legality
of clause pertaining to guarantee and agreement is the result of the establishment of BOT.