There was a large variation in the subject matter of disputes in the sample. The research indicates that disputes often occur due to ambiguous contract drafting, misunderstandings of the intent of risks transferred and the further risks associated with the differing interpretation of bespoke and/or complex terms.
The most common reason for the Project Company to issue a dispute notice was an increase in costs for which the Project Company was seeking compensation. Some common examples from the study were increased costs due to: unexpected ground conditions; unanticipated maintenance costs for existing infrastructure; a change in scope; and revenue forecasts. These disagreements were based around how to calculate the compensation to the Project Company or the Project Company arguing that the actions of the Procuring Authority led to reduced demand.
The most common reason for the Procuring Authority to issue a dispute notice was the ongoing failure of the Project Company to meet operational requirements. Some common examples from the study came about as a result of poor road quality or a failure to meet Key Performance Indicators.
The other category of disputes which appeared were those caused by actions of a third party. This includes decisions by an environmental regulator or ongoing protests by local populations. These are worthwhile noting as a reminder that external events have the potential to cause problems if handled poorly, either before contract signature or during project delivery.
Overall, disputes caused by issues related to permitting, environmental and social impacts or land acquisition and resettlement amount to 43% of all disputes identified on the 165 projects for which data was available. If disputes due to ground conditions and various other construction delays and associated cost overruns (for which full detail on granularity of causes was not available) are added to this category then the overall prevalence of disputes due to site conditions, permits and or approvals, social issues and land acquisition amounts to 57%.