Operation And Maintenance Agreements

Operating and maintenance agreements should include adjustments to the operator`s compensation when the operator`s obligations are extended or reduced for the duration of the contract. Yes, for example. B the sums paid to the operator are based on the operational effectiveness of the facility, the agreement should take into account an adjustment of payment to the operator when the quality of fuel or other consumables is covered by the technical criteria defined in the agreement. The term “management contract” has been used to cover a number of contracts ranging from contracts to technical assistance to large-scale operations and maintenance contracts, making it difficult to generalize. The main commonalities are that the contracting authority charges the contractor to manage a number of activities for a relatively short period of time (2 to 5 years). Management contracts are generally task-specific and focus on inputs, not results. Operating and maintenance agreements may have more results or performance requirements. This risk is minimal and can be shared among project participants before the project begins. Conversely, cases of force majeure during the operating phase could lead to an insolvent operator. In this case, the operator may not be able to meet its obligations under the performance standards of the agreement. The agreement should require the party affected by the force majeure event to take all possible measures to overcome the event, including appropriate resource expenditures.

However, non-compliance with contractual obligations arising from the event will generally prevent such a party from being late. In the “Water- Sanitation PPP” section, you`ll find several examples of water management contracts/O-M as well as other types of PPP agreements in this sector. A fully concluded agreement is an agreement in which all obligations and responsibilities for the operation and maintenance of the project are clearly transferred to the operator and the project company and project lenders have direct recourse to the operator. Assuming that important aspects of the operation and maintenance of the facility (including those that may affect the performance of the facility) are carried out by a third party under another agreement. Finally, parties to long-term operating and maintenance agreements should be aware of the possibility of changes that could affect the long-term nature of the transaction. B, such as a change in political regime or a regulatory change. In anticipation of such cases, the operator`s right to exemption and additional compensation must be clearly stated in the agreement. In a perfect world, these claims are compensated by the project company`s claims as part of an acquisition agreement or other project documents.