The Contracting Authority should recognize that the Direct Agreement may be used as a vehicle for the Lenders to alter, clarify or add provisions which go beyond step-in arrangements. While it may in limited circumstances be helpful to include other provisions, the Contracting Authority should beware that this does not undermine the underlying risk transfer position agreed in the PPP Contract unless this is specifically agreed.
Given that the operation of the Direct Agreement can affect the Private Partner's rights and obligations under the PPP Contract as well as the Contracting Authority's, it is recommended that the Private Partner should also be party to the Direct Agreement to acknowledge and consent to its terms. It is also advisable for the governing law of the Direct Agreement and the PPP Contract to be consistent.