Measures to transfer PPP project assets

The PPP contract should clarify:

  • 1. Mechanisms and procedures for transferring the assets of the PPP project to the contracting administrative authority’.
  • 2. Compensation to which the project company may be entitled in respect of assets transferred to the contracting administrative authority or to the project company or purchased by the contracting administrative authority.
  • 3. Transferring the necessary technology to operate the facility.
  • 4. Training the employees of the contracting administrative authority or the company that will replace the project company to operate and maintain the project.
  • 5. The project company shall continuously provide support sen-ices and several resources, including the supply of spare parts, for a reasonable duration after the project has been transferred to the contracting authority or to the new company.

The commitment to provide service

The PPP contract shall specify, as appropriate, the limits of the undertakings of the project company to ensure:

  • 1. Modifying the sen-ice in order to meet the actual demand for it.
  • 2. Regularity of service.
  • 3. Providing the sen-ice under the same conditions to all users respecting the principle of equality for users before public utilities.

The project company may, after obtaining the approval of the contracting administrative authority or the competent public authority, issue rules governing the use of the facility and the provision of the service.

Equality among end-users

The project company shall be committed to the equality of end-users of the services provided by the PPP project. This approach is consistent with the equality before public utilities principle as a fundamental principle in administrative law and the equality principle as a constitutional principle in the MENA countries’ constitutions. It may, in exceptional circumstances, establish preferential conditions for a specific category of users in accordance with the rules agreed upon with the contracting administrative authority.

The project company entitled, pursuant to the PPP contract, to utilize the project shall be committed to guarantee that all beneficiaries of products or services provided by the project are treated equally, with regard to the provisions governing the sale of such products or provision of such services. Whenever the public interest so necessitates, and after the approval of the competent authority, the project company may decide to provide special treatment for specific categories of beneficiaries who enjoy equal legal rankings, provided that such treatment shall be executed in accordance with general rules determined in advance and provided that within each category all beneficiaries shall be treated equally. The project company shall be responsible for providing compensation against any damages resulting from the violation of the provisions set forth in this chapter.

Granting preference to local services, local goods and national labor

In most MENA countries, the project company is committed to granting preference to suppliers of services and goods necessary for the implementation of the PPP project among national companies or companies controlled by nationals, subject to the following conditions:

  • 1. The ability of these companies to provide services or goods according to the necessary standards and on time.
  • 2. The increase in the cost of providing services or goods by such companies shall not exceed 10% of the costs provided by other companies.
  • 3. The terms and conditions applicable to the provision of services or goods shall be highly competitive with those of other companies.

The project company is committed to recruiting national employees and workers to carry out the PPP project provided that they have the necessary qualifications, in accordance with the conditions set out in the guide to the provisions and procedures of the PPP contracts.

Compensation against the risk of amendments to laws and/or regulations

The PPP contract shall specify the provisions relating to the right of the project company to receive compensation and the basis of its assessment as a result to any amendment in the national laws or regulations applicable to the infrastructure facility or the service it provides. The compensation is due if such an amendment increases the cost of implementing the PPP contract significantly or decreases the value of what the project company receives comparing with the performance and implementation costs and their expected value.[1]

  • [1] Antoine Mazin, Dealing with political risk in PPP infrastructure projects: legal recommendations based on recent cases, International Business Law Journal, 2017, 3, 189-202. 2 The Egyptian PPP law, Article 8.
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