Where the Procuring Authority decides not to retender the project and to take over the asset itself, it will typically still be required to appoint contractors to deliver the services required under the original PPP contract. The short term financial implication of this option will be more severe for the Procuring Authority as it will not receive an amount from the new Project Company.
The method of transferring the project assets, and whether to transfer them straight to the winning bidder (without being handed back to the Procuring Authority), should also be addressed at an early stage and there may be specific procedures required by the underlying legal system.
EXAMPLE Cross-border rail termination The PPP contract on a cross-border high speed rail project was terminated by the two national Procuring Authorities after the insolvency of the Project Company. A new operator was set up as a joint venture between the two national governments to continue the provision of the rail services. |