Operations and maintenance contracts establish contractual agreements between project companies and professional operators for the maintenance and operation of project facilities. Lump sum damages are financial compensation for loss, damage or breach by a party to an agreement granted by a contractual provision relating to the breach of the agreement. Contracts or agreements that involve the exchange of money or the promise of performance, such as .B. O&M agreements, often contain a provision for lump sum damages. The purpose of a lump-sum damages provision is to determine a predetermined amount to be paid if a party fails to perform the agreed performance. A lump sum compensation may only be provided for in a contract if (1) the damage is uncertain or difficult to quantify; (2) the amount is reasonable and takes into account the actual or foreseeable damage caused by the breach, the difficulty of proving the actual damage and the difficulty of finding another reasonable remedy; and (3) the damages are structured in such a way that they act as damage and not as punishment. If these criteria are not met, a lump sum damages clause is void. The Authority`s obligations under operations and maintenance contracts are generally limited to some or all of the following: 1. Payment obligations; 2. the obligation to obtain certain consents and licences; 3. Provision of various utilities, including fuel, water and other consumables; 4. obligations to grant the operator access to the facilities; 5.
the provision of certain information, e.B. instructions and stock drawings [see discussion of the Authority`s data in the context of the Authority`s obligations in this checklist]; (6) where applicable, the obligation for the Authority to make certain capital investments during the term of the agreement; 7. Obligations to pay taxes, especially for projects abroad. To the extent that possible future amendments to the Agreement may be anticipated at the time of performance of the Agreement, the Agreement should also specify the provisions that will change as a result of changes in fees or payments. Where possible future changes cannot be foreseen, the agreement should provide for a mechanism to determine the resulting price adjustment. . Compliance with operational requirements imposed by the regulatory system (p.B. compliance with environmental controls and local ownership and industry participation requirements) and other project documents. (1) What intellectual property licences must be granted by the operator with regard to the operation and maintenance of the facilities, during the term of the contract and after termination? After termination, the Authority should be granted at least one royalty-free licence to use the documents or technologies used and developed by the operator in relation to the systems, and this should also extend to subsequent operators. Should the authority have more rights than these? Does he want to be able to apply the technology, etc. to other systems elsewhere? If so, he will likely have to pay a premium for it – and the operator will defend against it. The agreement should also prevent a contractor from relying on the actions of the other to defend against a claim by the owner for delay or non-performance.
(1) The appropriate forum for dispute resolution depends in part on the nature of the parties – a local operator will be more comfortable with local courts than an international operator. 2. If alternative dispute resolution mechanisms are to be considered, they shall be clearly formulated. (3) A mechanism often used for disputes of a technical nature is the reference to an independent expert – the parties must specify whether the expert`s conclusions are final. 4. When considering arbitration, the parties shall determine the appropriate number of arbitrators, the rules governing the appointment and conduct of arbitration, the place of arbitration and, if the parties wish to receive international arbitration, whether the host country is a signatory to a convention on the recognition of the enforcement of arbitral awards. (5) A more detailed list of dispute resolution issues can be found in the Dispute Resolution Checklist. An operator shall endeavour to maintain exclusivity in a coverage area and to ensure that other parties in that area cannot provide the same service. However, the coverage area may be wide to cover housing that is not served by the operator and that depends on provision by third parties, including poorer areas where the operator is unable or unwilling to connect people. The authorities should therefore ensure that no further supplies are refused to those persons, even if another supply is only authorised for a limited period of time until the operator is able to establish an appropriate connection.
If this agreement is provided for by the project proponent, it must be addressed in the shareholders` agreement by and between the project participants and in the loan documents. Although this agreement would seriously affect the bankability of the project. Who bears the risk of post-contract events (some of which are discussed elsewhere) operations and maintenance contracts must refer to all levels of performance achieved by the EPC contractor at the time of delivery. Those values, adjusted for deterioration, should establish the starting point for the operator`s performance obligations. For example, for an energy project, it is imperative that technical and legal advisors ensure that the performance review and performance guarantee, as well as the agreement`s lump-sum compensation plans, are in accordance with the appropriate construction contract timelines. .