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Comparative Study of Contractual Clauses for the Smooth Adjustment ofPhysical Infrastructure and Services through the Lifecycle of a PPP ProjectAugust 20122 MethodologyJurisdictions with well-developed PPP Frameworks have, through experience, developedcontractual mechanisms that introduce a degree of flexibility and allow for variations in thephysical infrastructure and the services. To varying degrees, modern PPP contracts mayallow government or the contractor to initiate specific variations, and may also provide forvariations in the infrastructure and services in response to general changes in laws orgovernment policies that are applicable to the project.This report documents the outcomes of a desktop research study of PPP contracts andcontractual principles from jurisdictions with well-developed PPP Frameworks, comparingthe contractual clauses and principles that provide for variations in the physical infrastructureand services through the life-cycle of a PPP project.2.1 PPP Frameworks Compared in this StudyFor the purposes of this study, a number of PPP Frameworks have been selected forcomparison. The frameworks have been selected on the following criteria:The jurisdictions represented should have PPP Frameworks that have been testedthrough successfully delivered PPP projects.The jurisdictions represented should have a variety of levels of economicdevelopment.The PPP Frameworks selected should apply to a range of different infrastructuresectors, and to PPP models in which the infrastructure is designed, built, financedand maintained by the private sector but operated by government, as well as thosemodels in which the private sector is responsible for operation of the infrastructure.The PPP Frameworks selected should, collectively, be designed for use both inprojects where the private party’s revenue consists of government payments to theprivate party and in projects where the private party derives its revenue from usercharges (for example, tolls).The PPP Frameworks selected consist of the following:Australia's National Public Private Partnership Guidelines, Volume 3: CommercialPrinciples for Social Infrastructure (referred to in this study as the "Australian SocialInfrastructure Principles"), issued by Infrastructure Australia.Australia's National Public Private Partnership Guidelines, Volume 7: CommercialPrinciples for Economic Infrastructure (referred to in this study as the "AustralianEconomic Infrastructure Principles"), issued by Infrastructure Australia.The United Kingdom’s Standardisation of PFI Contracts Version 4 (referred to in thisstudy as the "UK SOPC 4"), issued by HM Treasury.South Africa's Standardised Public-Private Partnership Provisions (referred to in thisstudy as the "South African Standardised PPP Provisions"), issued by the NationalTreasury's PPP Unit.Page 6 of 35Foster Infrastructure
Comparative Study of Contractual Clauses for the Smooth Adjustment ofPhysical Infrastructure and Services through the Lifecycle of a PPP ProjectAugust 2012The National Highways Authority of India’s Concession Agreement for projectsRs.100 Crores and above: Updated version as on 23.03.2000 (referred to in thisstudy as the "NHAI Toll Road Contract").The National Highways Authority of India’s Model Concession Agreement for AnnuityBased Project - developed as a sample for Panagarh - Palsit project (referred to inthis study as the "NHAI Annuity Road Contract").Each of these documents is available on the Internet. The relevant websites are listed inAppendix 1.Key features of the selected PPP Frameworks are summarised in Table 1 on page 8. Theyapply to a range of different infrastructure sectors. Some are intended for use in projectswhere the private party’s revenue consists of government payments to the private party,others are intended for use in projects where the private party’s revenue consists of usercharges levied by the private party. Three of the Frameworks are primarily intended for usein projects in which the infrastructure is designed, built, financed and maintained by theprivate sector but operated by government. The other three Frameworks includeinfrastructure operation as a private sector responsibility.Each of the Frameworks other than the NHAI Toll Road Contract and the NHAI AnnuityRoad Contract are guidance documents, rather than standard contracts. They identify, ascommercial principles, how particular matters should be dealt with in PPP contracts.However, each of the Frameworks includes appropriate detail of the contractual approachesused in the various jurisdictions to provide for variations over the life of PPP projects.Page 7 of 35Foster Infrastructure
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