Application of the Build, Operate, Transfer (bot) Contract as a Means of Financing Development of Waqf Land: Malaysian Experience

Abstract

The build, operate and transfer (bot) contract has widely been applied in developing economies since the participation of private sectors has declined in the reconstruction and funding of public infrastructure. bot is a financing and operating approach, which has been practiced primarily in the area of infrastructure privatization in developing countries. Recently, application of the bot scheme has been carried out in many waqf institutions, especially Majlis Agama Islam Wilayah Persekutuan. The bot approach offers new perspectives in the field of waqf as it has the capability to enhance waqf property for the public’s benefit. Property enhancement is the major reason why waqf is enjoined by Islam. Waqf institutional involvement in developing its property and public infrastructures by way of bot contracts is proving to be a challenging exercise. This article examines the current practice of applying bot contracts in waqf institutions in general and in Majlis Agama Islam Wilayah Persekutuan in particular, with specific reference to the application of other types of contracts. In addition, the practice is discussed in terms of its compliance with the principles of Sharīʿah law. Moreover, this article aims to identify the issues, problems as well as challenges that might face waqf institutions during implementation of bot contracts.

Critical assessment of Islamic endowment funds (Waqf) literature: lesson for government and future directions

“…(2016) Cash waqf collection can have a positive impact on human development. Noor and Yunus (2014) Build, Operate and Transfer (BOT) scheme offers shariah option, which suits waqf development. Shabbir (2018) Categorize waqf land and prioritize the four sectors, namely, agriculture, commercial, residential, and religious.…”

“…(2013) Amuda et al. (2016) Noor and Yunus (2014) Shabbir (2018) Mohsin (2013) Shaikh et al. (2017) Suhaimi et al.…”

“…(2016) suggested that cash awqaf can also positively affect human development and, thus, is an important aspect of economic development. Noor and Yunus (2014) suggested that Build, Operate and Transfer (BOT) schemes offer a shariah option that is compatible with a waqf.…”

“…Second, awareness of the waqf should be another important point to consider and requires a proper socialization program ( Noor and Yunus, 2014 ; Iman and Mohammad, 2017 ) to ensure the sustainability of the waqf itself ( Adeyemi et al., 2016 ; Sulaiman and Zakari, 2019 ). Empirically, abundant idle waqf land exists, and various attempts have been made regarding making such land productive ( Pitchay et al., 2018 ; Thaker, 2018 ; Thaker et al., 2018 ).…”

Pemberdayagunaan Imbal Hasil Wakaf Uang Melalui Sukuk: Regulasi, Implementasi, Dan Modelnya Untuk Pemberdayagunaan Usaha Mikro, Kecil, Dan Menengah Di Indonesia

“…Indonesia melakukan inovasi pada instrumen wakaf, terutama wakaf uang (cash waqf). Walaupun mayoritas penduduk Indonesia beragama Islam dan telah mengenal instrumen wakaf ini sejak sebelum kemerdekaan (1945), regulasi terkait kebolehan wakaf tunai ini baru ada dengan diundangkannya Undang-Undang Nomor 41 Tahun (Noor, 2014) dan Syarikat Takāful Malaysia Berhad menggabungkan konsep wakaf dengan akad takāful dan menerapkannya pada produk asuransi bernama Takāful-Wakaf Plan (Ahmad & Wan, 2011). Sedangkan negara seperti Nigeria, mereka baru mengusulkan pengintegrasian instrumen wakaf ke dalam produk asuransi (Elesin, 2017).…”