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Body of Knowledge:
Structuring and Drafting the Tender and Contract
Any contract may be terminated early for a number of reasons instead of continuing for its expected life. A typical classification of reasons for early termination is listed below.
Termination for convenience (or "unilateral termination”).
The government will always reserve the right to terminate...
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Body of Knowledge:
Structuring and Drafting the Tender and Contract
The assets will be “handed-back” to the procuring authority at contract expiration. It is good practice to establish minimum criteria to be met by the assets so as to ensure that these are transferred back to the procuring authority in an acceptable condition. It is also good practice to note that...
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Body of Knowledge:
Structuring and Drafting the Tender and Contract
The last tasks of the process in the Structuring and Pre-launching Phase will include the following.
Formally raising the necessary approvals, packaging all tender documents, and running a control check. This is explained below; and
Planning the Tender Phase/tender process. The tender process...
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Body of Knowledge:
Structuring and Drafting the Tender and Contract
The outcomes of the work undertaken during this phase are:
The full tender package is complete and ready to be published. (As described in this chapter, the RFP terms and especially the final contract terms may be subject to refinements or even changes during the tender process. This is...
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Body of Knowledge:
Structuring and Drafting the Tender and Contract
Name of Document
Authors/Editors and Year
Description
htpp link (when available)
Key References for PPP Structuring
Infrastructure Australia National PPP Guidelines Volume 2: Practitioners’ Guide
Commonwealth of Australia (2011).
Includes guidelines to structure PPP...
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Body of Knowledge:
Structuring and Drafting the Tender and Contract
[25] Section 7.5 ("Calibration") of the Standardization of PFI Contracts guide (HM Treasury UK, 2007) provides useful information and advice on this matter...
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The land or site for building the asset may already be available, or it may be in the hands of the authority, and available for use.
However, in most of the cases it is not. In such cases, land has to be acquired. This is especially complex in linear infrastructure, such as roads and rails where...
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Most projects will be required to pass an Environmental Impact Assessment(EIA). Environmental issues may be related to a number of different aspects, which can be grouped in two categories.
The potential impact of the project in terms of contamination or pollution (gas emission, noise pollution...
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As with the environmental impacts and environmental clearance, the government should try to anticipate and obtain permits based on the outline plans for the works (or a reference design, if that has been prepared). This is done in order to mitigate risks and prepare the project. It should also be...
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Broadly speaking, design risk may refer to the following two type of events.
Defects in the design that result in the asset being built, but failing to meet the prescribed standards, legal requirements, and any conditions imposed by environmental or other stipulations. Such circumstances mean...
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Construction risk is the possibility that during the Construction Phase the actual project costs or construction time exceeds those projected.
The delay in the completion or commissioning will also represent a loss of income. This is assessed and categorized as a separate or ad hoc risk category in...
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The completion risk or the commissioning risk refers to the risk of failure to meet the construction outcome as prescribed, and/or the project as constructed failing to meet the completion acceptance criteria, thereby causing a delay in earning revenue. It is, in essence, a construction or a design...
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Site and ground conditions/geo-technical risks
The risk of unexpected geological or geo-technical conditions in the ground will also be commonly allocated to the private partner in a conventional project, that is, in those projects where geo-technical conditions do not represent a significant...
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Demand risk transfer should be always be considered with caution. Significant transfer of the risk, with no mitigation or sharing mechanisms, should only be considered when boosting demand is essential to the success of the project from the government’s perspective (see section 4.9). Another...
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In the context of user-pays projects (for example, a toll road, a rail project including service operations, or a water PPP including water supply to the public), revenue risk includes the risk of the charges to users not being at the anticipated level in each particular year. This may cause either...
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Fraud may be considered a subset of volume risk in user-pays PPPs when considering volume as the level of demand that effectively pays for the service. Fraud is commonly used to refer to willingly avoiding payment, whereas collection risks include non-payment when the payment may be or become...
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In government-pays PPPs, the risk of default by the authority is obviously a private side risk inherent in the strategic decision of investing in a particular country market or in the projects promoted by a particular authority. We basically refer here to credit risk.
This is more an issue in sub-...
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Inflation, when considering not only revenues but also costs, is a two-sided risk: higher inflation affecting costs will result in lower operational margins. However, provided that it is neutralized by a revenue indexation mechanism, it may result in higher nominal cash flows to debt service and to...
