Supervise the implementation of the project
The contracting administrative authority along with other concerned authorities regulating and monitoring the utilities and the sendees subject of the PPP contract, shall follow up on the project company during the construction and equipping of the project, and provision of the products and for sendees subject of the PPP contract, and shall ensure the fulfillment of quality' levels determined by the law; and may, in this regard, designate representatives on its behalf to monitor execution in accordance with the terms and provisions stipulated in the PPP contract and without prejudice to the criteria and monitoring bases set out by law if the PPP contract includes the entitlement of the project company' to operate or utilize the project, the administrative authority, in agreement with the project company, and under the supervision of the concerned authorities regulating and monitoring the utilities and services subject of the PPP contract, shall form a committee to ensure that the product or services rendered meet the required standards, as well as submitting periodic reports. In Egyptian PPP law, the Executive Regulations shall specify the committee’s system of work and the reports to be submitted by it. In the case mentioned above, the project company must provide the committee with all required documents, information, or data necessary' for the committee to undertake its role and to allow the committee to visit and inspect the sites at any time, in accordance with the provisions of the Executive Regulations of this law.
The contracting administrative authority' shall be responsible for supervising the execution of the project, ensuring the achievement of the highest required performance levels, evaluating the performance of the project company and continuing the availability' of the requirements, standards, arrangements and equipment stipulated in the PPP contract.
The contracting administrative authority' shall submit a periodic report to the Supreme Committees in the MENA countries on the results of supervision and evaluation of the PPP project, containing its observations, recommendations and actions taken in accordance with the rules to be determined by a decision of the administrative authority' and in most of the MENA countries after the approval of the cabinet in the concerned MANA country.
The contracting administrative authority', after coordination with the concerned department, may' assign supervision and evaluation tasks to experts or entities having the necessary technical capabilities to carry' out these tasks. This outsourcing is a new approach in the MENA countries to exercise a higher threshold of technical expertise upon supervision of the implementation of the project as this higher threshold of supervision has a positive impact to the public utility’s management standards.
On the other hand, in Egyptian PPP law, the project company shall provide the administrative authority' with its shareholders’ agreements and draft contracts intended to be entered into by it with third parties for the purpose of executing the works and services subject of the PPP contract, in accordance with the
Substantive mechanisms of PPP contracts 173 procedures and timing specified in the Executive Regulations. The administrative authority shall have the right to object to the conclusion of such contracts within a period not exceeding 60 days from the date of their submission. An objection shall be made in case it is proven that the third party contract counterparties have been previously bankrupted or are subject to liquidation procedures, or have been previously convicted or, in case of a judicial person, whoever legally represents it has been subject to a final court judgment for an immoral crime, or have been struck off the vendor lists of the contracting administrative authority or if there are national security considerations that necessitate such objection.
Environment, health and safety
The PPP contract must stipulate that the project company must also warrant that environmental, health and safety conditions are met for the employees and the end-users of the project.
Breach of contractual undertakings
The contracting administrative authority, after coordination with the concerned department, may temporarily operate the facility on its own or with the assistance of another investor, in case the project company breaches substantially its contractual undertakings, or if there is a serious error or an inability to achieve the quality and performance levels prescribed in accordance with the PPP contract.
The contracting administrative authority shall, after coordination with the concerned department, notify the project company of the breach, error or failure to achieve the quality and performance levels and request its adjustment within the period specified in the notification.
The above-mentioned principles shall not prejudice any damages or penalties prescribed to the contracting administrative authority under the PPP contract.
The administrative authority has the right, either directly or through a selected third party, to manage the operation or utilization of the project if the project company materially breaches its obligations in operating the project or meeting the quality levels set by law or in the PPP contract, and does not remedy such breach, and the lenders do not step in to remedy such breach within the period provided for in the PPP contract from the date of their notification of such breach, without prejudice to the project company’s obligation to compensate the administrative authority for the damages resulting from such breach.
