Comparative Study of Contractual Clauses to Provide for the Smooth ...
Comparative Study of Contractual Clauses to Provide for the Smooth ...
Comparative Study of Contractual Clauses to Provide for the Smooth ...
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<strong>Comparative</strong> <strong>Study</strong> <strong>of</strong> <strong>Contractual</strong> <strong>Clauses</strong> <strong>for</strong> <strong>the</strong> <strong>Smooth</strong> Adjustment <strong>of</strong> PhysicalInfrastructure and Services through <strong>the</strong> Lifecycle <strong>of</strong> a PPP ProjectAugust 2012competitive environment and <strong>the</strong>n request <strong>the</strong> private party <strong>to</strong> proceed with <strong>the</strong> variationat a later date.12. Where government proposes a significant policy change that can be implementedthrough ei<strong>the</strong>r <strong>the</strong> variation process or <strong>the</strong> change in law process in a PPPcontract, government should consider <strong>the</strong> relative merits <strong>of</strong> using each process,including <strong>the</strong> impact upon value <strong>for</strong> money and <strong>the</strong> long term PPP relationship.13. Voluntary termination rights can provide some additional flexibility in PPPcontracts, but are significantly constrained by compensation obligations andsovereign risk considerations, and should only be used where o<strong>the</strong>r mechanismscannot provide a satisfac<strong>to</strong>ry outcome <strong>for</strong> government.14. In addition <strong>to</strong> including appropriate clauses in its PPP contracts <strong>to</strong> provideflexibility, government should establish appropriate contract managementarrangements <strong>to</strong> effectively manage <strong>the</strong> variation process.Page 30 <strong>of</strong> 35Foster Infrastructure
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