Category: Public Works

State Authorities (Public Private Partnership Arrangements) Act 2001 Public private partnerships are arrangements between the public sector and the private sector for the delivery by the private sector of certain public infrastructure and/or public services, which traditionally would have been provided by the public sector. Public private partnerships covered under the Act include arrangements with […]

The debt funders are granted security over the company’s assets.  In effect, the sponsor’s liability is limited to their equity contribution or any other obligations they may own in other capacity. The lenders will analyse the project and undertake considerable legal, technical, financial due diligence on the project.  Key considerations include  the allocation of risk, […]

Under PPP arrangements, in contrast to more traditional procurement, the private sector finances the projects from the outset.  It receives payment or pre-payment provided the asset meets performance criteria and availability. There may be a unitary payment upfront or payment over a period.  As the sponsors are unlikely to be in a position to put […]

Debt funders in PPP projects will generally require a direct agreement with the project company’s key counterparts to enable to step it in the event of the deferral or distress. Following an event of default  the lender will typically be in a position to appoint a receiver over the assets of the borrower company.  They […]

The design risk is a key element of PPP.  The authority specifies services requirements in terms of outputs.  The project entity is responsible for delivering that service.  Payment is made against performance.  Performance is graded to incentivise the project company to  perform. Poor performance may be penalised. Central to the notion is that the private […]

Public private partnerships involve the  private sector in the provision of public services.  It changes the role of the public sector from owner and provider to enabler, purchaser and guardian of the public interest for the end users. The public private partnership model gained ground in the 1980s and 90s consistent with the theme of […]

The principal agreement in a PPP arrangement is the project contract.  Originally different agreements were used for different phases of the project, for example, the development agreement to cover development and construction and  operation agreement or facilities management agreement to cover the operational phase. The more modern practices to provide a single agreement to cover […]

New Public Sector Contracts New public-sector contracts came into force in 2007 replacing GLDA.  A significant motivation for  the new contracts was to prevent extra costs and costs overrun by passing the risks and responsibilities to the contractors and consultants insofar as possible. The contract seek to give the public-sector a significant advantage relative to […]

Delay & Compensation The public works contracts make claims for delay more difficult than in pre-existing and conventional contract.  There are extensive recordkeeping obligations.  There are obligations to update programmes which may disincentivise the contractor in making claims. The contractor is deemed to have included in the price and in programme for delays and compensation […]