Construction Contracts Within the Framework of PPP / Concession Projects - A Legal Overview (From a Greek Law Perspective)
Areti Roditi, Senior Legal Counsel, J&P-AVAX SA, Greece
Under a typical PPP (Public – Private Partnership) structure , the Awarding Authority / Grantor (“the Grantor”) executes the Project Agreement with the Project Company, which is a Special Purpose Company (SPC) consisting of the members of the Successful Tenderer (hereinafter referred to as the “SPC” or the “Project Company”). By virtue of the Project Agreement, the SPC undertakes all rights and obligations in relation to the design, construction, financing, operation and maintenance of the Project in accordance with the terms of the Project Agreement. When the project is a “concession” , the main consideration of the SPC consists in the right of exploitation of the Project, namely in the right to charge end users for the use of the project (e.g. in toll motorways). In other PPP structures, the SPC receives annual payments (availability payments) from the Grantor which are linked to the availability of the project and achievement by the SPC of certain performance standards, however the majority of risks lies with the SPC. For instance, in case of failure to meet certain standards (as these are set out in the Project Agreement), the SPC suffers performance deductions.
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