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Public Private Partnerships for Infrastructure Financing. OECD Middle East and North Africa Initiative on Governance and Investment for Development Istanbul - 8 November 2006 Mary Bonar Stephenson Harwood mary.bonar@shlegal.com. Benefits of a PPP Concessions Law.
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Public Private Partnerships for Infrastructure Financing OECD Middle East and North Africa Initiative on Governance and Investment for Development Istanbul - 8 November 2006 Mary Bonar Stephenson Harwood mary.bonar@shlegal.com
Pitfalls of a PPP Concessions Law Inflexibility – PPPs vary from sector to sector eg water, transport, energy Incompatibility with the general framework – PPP has to function in local environment eg workforce, supplies, sales Public acceptance not guaranteed – Political issue to be managed eg monopoly rights, non-payment culture Enforcement – Needs to work for government, private sector and general public
Key points about the legal documents • Complex structures require many documents • Start before the competition not afterwards • Documents need to reflect the required or agreed risk allocation • Drafting and negotiation should not distort that risk allocation
Outline Structure – parties and legal documents INTERNATIONAL FUNDERS GOVERNMENT SPONSOR EXPORT CREDIT AGENCIES/BANKS Direct Agreement PPP Concession Contract SHAREHOLDERS/ PARTICIPANTS CONCESSION VEHICLE Equity Funding Terms LOCAL FUNDERS Documentation Security Documents Insurance Contracts Subcontracts INSURERS CONSTRUCTION CONTRACTOR OPERATOR MAINTAINER Direct Agreements/ Step-in arrangements
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