Contract Agreement For Infrastructure Project

In most cases, too, the private party must invest its own money to launch the project. It is only when the project has reached certain stages that the government will disburse funds. Therefore, money from private parties is stuck in the project for some time. It would therefore be fair to say that the risk associated with labour contracts is also higher. Finally, the government and private parties cooperate with transfer contracts. Under this contract, the government sells its resources in its entirety. So if a government has land on which it wants to build a bridge, they would sell the land to a private party, provided the bridge is developed within a specified time frame. In many cases, the government simply sells its assets unconditionally. This is usually the case when the government is in high debt and needs funds to repay its loans. Alternatively, it could also be a way to reduce the focus on non-central areas and use revenue to increase emphasis on key areas. Risk profile for project risks supported by each party.

This is because they own the heritage and therefore the majority stake in the project. Here, the private party is the dominant player, because they have a lot of freedom and autonomy. Since they have to invest their money in the project, the private party must also take a big risk. This handy note examines the main agreements of an infrastructure project. The project documents described below are not relevant to all infrastructure projects – project structure, procurement method, funding model and project type, and the parties determine the necessary project documents. For more information on infrastructure acquisition and construction contracts, see the practical notices: infrastructure projects – procurement and infrastructure projects – types of construction contracts. Build Operate Transfer are Greenfield contracts. In these types of contracts, the private party is the dominant party. In such contracts, the government makes available the land for the construction of the project. However, the design, construction and management of the project must be carried out by the private studies party. These contracts are usually awarded because private parties have certain skills that the government does not have! As a result, the government is more dependent on the private party. For more information on the parts of the project mentioned in this note, see the practical note: Infrastructure Projects – Parties.

Note that the party called “employer” in this practice note would generally be “Project Co” as part of a structured infrastructure project for projects. The construction contract is essential for the infrastructure project. As a general rule, it is established that, depending on the method of purchase, there may be a work contract for the entire project (for example. B an EPC/Turnkey contract) or several contracts with different contractors for several batches of work (for example. B as part of the EPCM contracting).