2.6.3 KEEPING THE PROJECTS PROTECTED THROUGH SECURITY PACKAGES
The formal allocation of risks is embodied in a set of contracts, collectively called the Security Package. Each contract defines the relationships (including risk allocation) between two or more of the cooperating parties in a PPP initiative.
The general relationship between the different parties, as well as the contracts binding them, is presented in Figure 2-7, while Table 2-9 summarizes the primary documents needed for every type of PPP contract.
Figure 2-7: Contracts Binding the Actors in a PPP Arrangement
Table 2-9 : Primary Documents in the Security Package
PPP Contract | Defines Relationship Between |
Project agreement | Government and private sector participation (PSP) proponent (the project company) |
Fixed-price, date-certain, lump-sum, turnkey construction contract | PSP proponent and construction consortia |
Operating and maintenance agreement | PSP proponent and operating company (if different) |
Loan agreements | PSP proponent and lenders |
Shareholders' agreement | Equity investors in the project company |