PPP Contract Negotiation, Strategy & Legal Agreements

Euromoney Learning Solutions

How long?

  • 3 days
  • in person

Euromoney Learning Solutions

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Who should attend

  • Government officials, ministries and public sector agencies
  • Investment planning commissions
  • Project developers, sponsors and consultants
  • Senior investment and credit analysts
  • Commercial, Business Development, Bid and Acquisitions Managers
  • Lawyers and legal counsel
  • Project financiers
  • Credit, Risk and Investment officers
  • Chief Financial Officers and Controllers
  • Infrastructure and structured finance specialists

About the course

PPP Contract Negotiation, Strategy & Legal Agreements is designed to provide you with a practical understanding of how to design, develop, implement and monitor successful PPP contracts and legal agreements.

This interactive five-day programme will clarify the key parameters that make for robust PPP agreements, starting from key principles in their design and implementation all the way to the practical aspects of the contractual and legal implications of PPPs.

After reviewing the basic factors for considering Private Participation in developing infrastructure, you will learn how to best plan the process of introducing private expertise and finance. Recognising that many PPPs are used to provide public services, the course will delve into the importance of involving different stakeholders in the design of the arrangement, the appropriate allocation of risks and responsibilities between the parties, and how that is represented within a contractual arrangement. We will also look at the fiscal impact of PPPs and the need for governments to sufficiently manage direct and contingent liabilities related to such agreements.

By the end of the course, you will have learned specific and practical techniques to successfully draft and implement a PPP agreement based on international best practice.

Course objectives

  • Provide an introduction to and context for developing infrastructure financing solutions by using PPPs
  • Describe the process of developing a project from the concept stage to implementation and contract supervision
  • Present a set of tools and techniques that can be used as a basis for sound and rigorous evaluation, decision making, monitoring and control of PPPs
  • Understand the main principles and techniques for robust PPP contract design
  • Provide a basic primer of commercial terms and their implications in different legal environments where PPPs take place
  • Link risk assessment to contract clauses by understanding the critical business aspects that are to be enshrined in a contract
  • Given the fact that PPPs have the added challenge of being a long term arrangements, afford practical insights and techniques to effectively introduce clauses that allow modifications and changes to the original terms of the contract without jeopardizing the overall business relationship

Methodology

This course combines theoretical presentations with relevant case studies and interactive group discussions. It strikes a careful balance between qualitative and qualitative metrics, using case studies to illustrate core concepts or address counter-positions (i.e. the public and private perspectives when undertaking a PPP project). Role-playing will also be used to showcase policy issues and their applicability with financial and bankability issues common in PPP design, development and monitoring.

Agenda

Day 1

An overview of PPP (definition, reason for using, championing)

  • History of PFI’s and PPP’s
  • Reasons for choosing PPP
  • Project championing
  • Alternatives to PPP
  • Role of Lawyers in PPP and Legal Systems

Planning for PPPs (feasibility studies, process check list, analysing investment decisions)

  • Structure of PPP deals
  • Key problems being faced by the sector and ways private participation can address the problems
  • Key areas of responsibility
  • Appointing government advisers, writing and communicating Government Investment plans, and state planning decisions
  • Determining the best allocation of responsibilities and risks between operator and the contracting authority
  • Writing business cases, financial models, comparators, guidelines

Exercise 1 Bidding & Tendering

PPP Risk identification, mitigation and allocation

  • Overview of key risks, Business cases (List of risks),
  • Value for Money and Risk
  • Risk appraisal, identification
  • ‘Bankability’ and the need for contractual security
  • Risk under PPP Contract, key contractual clauses
  • Proper allocation

[Case study of risk assessment

  • Differentiation of risk given different perspectives
  • Estimating probability of risk
  • Value judgment of risk and implication of risk
  • Qualification vs ‘emotion’ of risk]

Day 2

Legal Issues in setting up/running PPP’s

  • Constitution, Enabling legislation and regulations
  • Supporting legislation in procurement ,company law, contract law, land law, zoning, financing, employment, capital markets, admin law and utilities
  • Standard Model clauses and contracts
  • MOJ Opinions
  • Working with and being transaction advisors

Financing PPP’s and Legal Documents

  • Types of Financing, main constraints
  • Structure of financing over time
  • Financing Documents-role of public and private sectors
  • Banks, Capital markets, Islamic Financing Options, VGF, Multilateral agencies - World Bank, PIAFF, IFC
  • Fiscal impact of PPPs, risk management framework, management of contingent liabilities

Exercise Bidding before Multilaterals

Procurement process (bidding, evaluation & selection)

  • Types of procurement
  • Procurement Legislation
  • PPP Contracts v tendering rand procurement rules

Day 3

Negotiation of PPP Document

  • Acting for public bodies or private sector
  • Technique of negotiation: Dance of Seven Veils; clear understanding of documents; know your position; reaching a median position
  • Fair resumption of risk allocation
  • Good people who can negotiate

Exercise 3 going through PPP agreement Case study

Structuring PPP’s and Upstream & Sector Policy

  • Upstream policy implications and their effect on PPP agreements
  • Identifying MDA responsible for infrastructure services, the responsibility of other MDA’s, and their relation to PPP agreements
  • Market structure
  • Competition and regulation
  • Implications of different legal jurisprudence environments, local courts, and legal precedence

Government prioritization-Selecting projects, Budgeting

  • NIP, Investment Plan
  • State Planning Review and investigation
  • Value for money and Business cases
  • Budgeting review and project liaison
  • Project management of PPPs and elements thereof

Day 4

Components of PPP Legal Agreements

  • PPP Agreement, reflection of risk profile and RJP
  • Finance Agreement
  • PPP ≡ Model
  • Support contracts, building contracts, O & M Contracts, Service Agreements

Key Contractual Clauses

  • Estimating probability of risk, developing a risk matrix, use of ‘heads of terms’ for risk allocation prior to contract drafting
  • Standardisation, credit committees, institutional investors
  • Dealing with change within a PPP agreement: tariff resets, transition periods, extension of contract terms
  • Conflicts within a PPP

Day 5

Contract management, monitoring & evaluation

  • Start of the Beginning
  • Statistics –cost, value ,expertise
  • Monitoring team- private sector or public sector
  • Communicate success story

Dispute Resolution

  • The dispute resolution procedure, expedited dispute resolution, expert panels
  • Arbitral awards
  • Management of renegotiations
  • Facilitation and negotiation, Mediation and Arbitration
  • Risk mitigation instruments and guarantees
  • Choice of law and jurisdiction

Implementing and closing PPP

  • OBC’s > FBC’s
  • Negotiation> Commercial Close> Financial Close
  • Legal Close and conditions Precedent satisfaction
  • Post close formalities

Case Studies

  • Nigeria railways OBC
  • Lagos Lekki lekki roadway
  • Albania hydro Case study
  • India airports Hyderabad

Course summary

Experts

Mark Richards

Mark is a partner and head of the projects & infrastructure finance team at BLP. He has extensive experience in providing multi-disciplinary advice to both public and private sector clients, and he works on a wide range of high value, high profile, innovative and complex infrastructure projec...

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PPP Contract Negotiation, Strategy & Legal Agreements at Euromoney Learning Solutions

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