This contract is between the private partner and the Operation & Management contractor and governs the operation of the services agreed under the project agreement, including the maintenance of the facilities constructed and provision of support facilities (if applicable). The private partner could have the option of undertaking the O&M contract by itself, or entering into a separate O&M contract with one or more entities. The separate O&M contract enables the private partner to defray his risks and also take advantage of any specialist skill sets if required.
In cases where an O&M contract has been executed between the private partner and the O&M contractor, the default committed by the O&M contractor would amount to the default of the private partner with respect to its obligations under the project agreement. Under the MCA for development of National Highways under PPP framework, the private partner makes an express commitment that the selection or replacement of the O&M contractor and the removal of the O&M contractor will be subject to the prior approval of the public entity from the perspective of national security and the public interest.