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
STEPHENSON HARWOOD
Benefits of a PPP Concessions Law
Private
Sector
Bidders
Funders
Benefit
Public Sector
Transparency
of policy
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

Certainty



Government
Commitment



Clarity and
cost control

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Ring-fenced
from general
legal
framework
?
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
STEPHENSON HARWOOD
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
STEPHENSON HARWOOD
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
STEPHENSON HARWOOD
Outline Structure – parties and legal
documents
GOVERNMENT
SPONSOR
EXPORT CREDIT
Direct Agreement AGENCIES/BANKS
PPP Concession Contract
SHAREHOLDERS/
PARTICIPANTS
Equity
Documentation
CONCESSION
VEHICLE
Funding Terms
Security Documents
INTERNATIONA
L
FUNDERS
LOCAL
FUNDERS
Subcontracts
CONSTRUCTION
CONTRACTOR
OPERATOR
MAINTAINER
Direct Agreements/
Step-in
arrangements
STEPHENSON HARWOOD
Match the documentation to the process
Pre Competition
Develop competition and evaluation rules,
PPP specification, concession principles,
government comparator, risk matrix,
government policy statements consultation
Competition Phase
Procurement notice
Prequalification pack
Announcement of prequalified bidders
Invitation to tender
- risk matrix
- concession terms/contract
- financial model requirements
- required bid and variants
STEPHENSON HARWOOD
Match the documentation to the process
-2
Negotiation Phase
Public Sector
Private Sector
Concession Agreement
Sub-contracts
Funder Direct Agreement Funding Documents
Security Documents
Implementation
Phase
Approvals
Commencement notification/sign-off
STEPHENSON HARWOOD
Offices
Athens
Bucharest
Guangzhou
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Johannesburg
Kuwait
London
Paris
Piraeus
Shanghai
Singapore
Associated
Associated
Associated
Associated
Associated
Mary Bonar
Direct Line:
+44 (0)20 7809 2061
Direct Fax: +44 (0)20 7003 8255
Email:
mary.bonar@shlegal.com
Web:
www.shlegal.com
STEPHENSON HARWOOD