The concept of "Material Adverse Government Action" (or "MAGA"), is applicable to contracts, such as PPP Contracts, where one of the parties is a public sector entity, or government. MAGA events typically:
(a) delay or prevent the private sector party from performing its contractual obligations; and/or
(b) have a material adverse financial impact on the private sector party; and
(c) are within the public sector entity/government's control or are best managed by the public sector entity/government as compared to the private party,
and therefore the risks associated with such events are allocated to the public sector entity/government.
MAGA events are also referred to as "political risk" or "political force majeure". As described in Section 1, Force Majeure, depending on the specific PPP Project circumstances, some forms of political force majeure may be treated as shared Force Majeure risk (or in some cases even a Private Partner risk). In this Guidance, MAGA events can be clearly contrasted with Force Majeure events as the risk of their occurrence is allocated entirely to the Contracting Authority and they are given separate treatment in their own contractual provision.