(a)        Transfers and assignment

The concessionaire will want the ability to freely assign the contract to its lenders by way of security as this will be a condition of the funding security package.

The government may also want the flexibility to transfer the PPP contract to a successor agency (government reorganization is not an unrealistic or unthinkable scenario) but it should not be permitted to do so where the new agency does not have the same financial strength to manage the obligations under the contract.

(b)        Local content requirements

Local law may provide for minimum percentage levels of employment or sub-contracting to local firms, however, if it does not, this can be detailed in the concession agreement itself. That said, such obligations are often relatively weak and may have reasonable exceptions and derogations that are difficult to police. For example, a common exception would be that the minimum levels of employment do not apply where the requisite skills do not exist in the local workforce.

(c)        Waiver of sovereign immunity

Investors and lenders will wish to have any rights of sovereign immunity waived to the fullest degree possible. If the government has assets in other countries, local advice may be required to understand whether the waiver offered will be sufficient to allow enforcement over those assets under local law.

(d)        Intellectual property

The contract should ensure that the government receives an adequate transfer of all intellectual property in the project so that it may use and modify the intellectual property when operating the facility following termination. The government should be protected by an indemnity in case any infringement claims arise against the government at any time after the concession agreement has been terminated.

(e)        Confidentiality / Freedom of information

Confidentiality provisions are fairly standard but consideration should be given to any freedom of information laws that are currently in place or other transparency initiatives. In some cases we have seen very clear statements that the concession agreement is to be treated as a public document and therefore it must be available for public inspection and scrutiny.