Region: South Asia
Country: Philippines
Sectors: Water and Sanitation
Keywords: Legal Framework, Contract, Water supply and sewerage system
DocumentLink(s):
Document Details:
Sample bulk supply Agreement (BOT) for water
Sample Agreement developed by Castalia for PEGR (a joint initiative between the Governments of Australia and the Philippines)
National Economic and Development Authority (NEDA)
Simple and clearly drafted agreement – could be used for civil or common law jurisdiction. Developed to be in accordance with Republic Act No. 6957 (BOT Law of the Philippines). Specifications and performance standards clear.
Operator to design, build, finance, operate and transfer offtake, water treatment plant and transmission mains to a bulk deliver point.
Parties appoint an independent verifier – whose costs are to be borne equally by the parties – to review design and monitor performance.
Operator to provide a specified amount of water to agency – any in excess can be sold to third parties.
Tariff – Agency to pay tariff for bulk water. The Tariff should have two components, namely: (1) Fixed Payments - This is based on the capacity made available to the Agency. (2) Variable Payments - This is based on the actual amount of Treated Water delivered by the Company to the Agency.
Agency Step-in Rights upon the occurrence and continuance of a Company Event of Default that could reasonably be expected to materially adversely affect the Company’s ability to operate and maintain the Facilities in accordance with this Agreement
Limitation of liability – there is no overall liability cap although there is a cap on liability for liquidated damages for delay
Operator with right to assign agreement to lenders – otherwise not to assign without prior consent
Operator not to permit sell down of shares by initial owners until after 2nd anniversary of commencement of operations of the plant.
Disputes – expert panel, the arbitration in accordance with the arbitration rules of the United Nations Commission on International Trade Law (UNICTRAL).
Enforcement of awards - Interesting provision included 19.5 – “By execution and delivery of this Agreement each Party hereby accepts and consents to the jurisdiction of the aforesaid Expert Panel and arbitral panel and, solely for purposes of the enforcement of an Expert Panel and arbitral award under this Section 19 (Dispute Resolution), to the jurisdiction of any court of competent jurisdiction, for itself and in respect of its property, and waives in respect of both itself and its property any defense it may have as to or based on sovereign immunity, jurisdiction, improper venue, or inconvenient forum. Each Party hereby irrevocably consents to the service of any process or other papers by the use of any of the methods and to the addresses set for the giving of notices in Section 21.1 (Notices). Nothing herein shall affect the right of any Party to serve such process or papers in any other manner permitted by law.”
Termination – in event of operator default, authority may take over and purchase all of the Company’s right, title, and interest in the Facilities and the Project for the purchase price set out in schedule [ ] once it has given financiers opportunity to exercise their rights over Facilities (20.1.1.2).
Handover of assets and employees on expiry (schedule O) – provision for an orderly handover of assets and inventory of assets and inspection prior to handover.
Related Information:
PPP Arrangements /Types of Public-Private Partnerships
Tracking Reference:
Bulk-Water-Supply-Sample_.pdf
Updated: August 25, 2020