3. Purpose
1. Specify the Relationship between the
government and the private entity
2. Define the Responsibilities of both parties
3. Identify the Requirements necessary to
efficiently and effectively perform tasks
The Concession Agreement
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4. • Government’s perspective:
– Defines the service delivery by the private entity
– Fixes the budget for a public facility
– Ensures value for money
• Private entity’s perspective:
– Defines compensation for service delivery
– Enables long-term planning
– Minimizes political interference
– Provides clarity on expectations of the government
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The Concession Agreement
5. • Scope
– Description of physical area and rights
• Duration
– Period for which concession is being granted
• Termination
– Material breach
– Insolvency
– Misrepresentations
– Assignment
– Payment default
– Failure to comply with arbitral award
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Principal Contract Terms
6. • Government’s Obligations
– Granting right of access to site
– Providing licences, permits, approvals
– Procuring leases, easements, rights of way
– Passing legislation
– Availability payment and/or user fees
• Private Entity’s Obligations
– Financing, construction, operations, maintenance
– Compliance with applicable legislation
– Minimum number of national citizens (if applicable)
– Concession fees (if applicable)
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Principal Contract Terms
7. • Force Majeure
– General description of events
– Risk shared between the parties
– Mitigation of force majeure events
– Extension of concession, cap?
• Change in Law
– Extension of concession
– Grace period
• Governing Law
• Dispute Resolution
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Principal Contract Terms
