Exhibit 6.1 Legal Issues and Strategies Used to Address Them for International Transportation PPP Projects | |
Issues | Strategies |
Lack of legal authority to enter into a PPP to develop transportation infrastructure projects at the national level was widespread in many nations, particularly in developing nations and those countries formerly part of the Soviet Union | Introduce broad and flexible legislation that provides the legal basis for national or local transportation agencies to use PPPs as a way to expedite financing and delivery of transportation infrastructure and support services. |
Overly restrictive covenants in concession agreement that limited the concessionaire's ability to adjust toll rates in a timely manner and to introduce alternative project delivery approaches, even if more cost-effective | Incorporated more flexible language in the concession contract agreement to allow more flexibility for the concession team to adjust toll rates, apply alternative project development approaches, and introduce innovative technology over the terms of the contract, based on a shared risk-reward arrangement with the sponsoring government or public agency. |
Held the concession team accountable for service and condition performance standards through regular inspections and reviews. This was especially important to account for unanticipated changes in the underlying conditions that serve as the basis for the PPP agreement, such as technological innovation and obsolescence, major demographic and land use shifts, and changes in life styles that significantly influence travel behavior of the public and freight shippers. | |
Burdensome requirements for majority participation by quasi-public company established by the government reduces flexibility and cost-effectiveness of the private sector members of the joint venture team and the potential value capture (reward) relative to the risks held by the private side of the JV | Eliminated requirement for majority PPP responsibilities being held by the government partner of concession teams through quasi-public infrastructure development companies set up by the government, which had reduced the attractiveness of the PPP project to qualified concessionary companies which would otherwise be interested in competing for the project. |
Differences in legal authority for PPPs between sovereign nations in a region characterized by significant cross-border movements of people and goods creates the potential for incompatible PPP contracting and project delivery which may result in stalled projects that depend on several nations to agree on the nature of the project, its funding and financing approaches, and its timing relative to the respective capabilities of each nation and the relative benefits and costs each participating nation will accrue | Develop contract language that is compatible with the legal framework and authority of each participating nation for sponsoring and administering transportation PPPs for projects sponsored on a bi-lateral or multi-lateral basis. Efforts in the European Union to establish compatible legal and technological frameworks for infrastructure delivery and operation is a major step to achieving this on a regional basis, while still respecting the sovereign nature of each member nation. |