Water projects : a commercial and contractual guide / Jeffrey Delmon.

Format:

Book

Author/Creator:

Delmon, Jeffrey, author.

Series:

International and National Water Law and Policy

Language:

English

Subjects (All):

Civil engineering contracts.

Physical Description:

1 online resource (462 pages)

Edition:

1st ed.

Place of Publication:

The Hauge, The Netherlands : Kluwer Law International, [2001]

Summary:

The water sector has long been identified as ripe for private sector investment.Prolonged neglect by the public sector has resulted in an urgent need for significant commitment of finance and management resources.

Contents:

Intro

Title Page

Copyright Page

Acknowledgements

Table of Contents

Detailed Table of Contents

Preface

Chapter 1 Private Sector Involvement

A. The Benefits of Private Sector Involvement

1. Efficiency

a. Operating costs

b. Problem-solving

c. Political considerations

2. Technology and know-how

3. Management

4. Financing

5. Cost of procurement

B. Elements of a Successful Project

1. Transparency of process

a. Competitive tendering

b. Communication during tendering

2. Stable policy

a. Political/government policy

b. Legal framework

c. Regulatory framework

3. Credit risk

4. Scope of project

a. Nature of the project

b. Project site and area

c. Exclusivity

d. Existing assets

e. Transfer of employees

5. Competition

6. Information on the project

7. Financing

a. Value of project

b. Rate of return

c. Security of revenue stream

d. Public sector support

e. Enforceability of authority obligations

Chapter 2 Structuring Private Involvement

A. Management Contracts

1. Payment

2. Risk

3. Advantages and disadvantages

a. Restructuring tariffs

b. Developing a regulatory framework

c. Private sector confidence

d. Resolution of critical issues

e. Structuring finance

f. Developing a BOT or concession structure

g. Political considerations

B. BOT Projects

1. Concession agreement

2. Water purchase agreement

3. Raw water supply agreement

4. Construction contract

5. Operation and maintenance agreement

6. Shareholders' agreement

7. Financing agreement

8. Advantages and disadvantages

C. Concessions

2. Project company obligations and regulation

3. Project structure

4. Advantages and disadvantages

D. Share Sale Privatisation

1. Project company undertakings.

2. Increased efficiencies

3. Restrictions

4. Control

5. Restructuring

6. Employees

E. Parties Involved in Water Projects

1. Host government

2. Authority

3. Project company

4. Bulk purchaser

5. Supplier

6. Construction contractor

7. Operator

8. Lenders

9. Multilateral, bilateral and export credit agencies

Chapter 3 Selecting a Commercial Structure and Source of Financing

A. Principal Considerations

1. Where is the money?

a. Revenue/cash flow

b. Credit risk of the purchaser

c. Financing initial capital expenditures

2. Who takes the risk?

a. Cost

b. Construction and operation

c. Completion date

d. Performance of the project

e. Maintenance regime

f. Termination

3. How are decisions made?

B. Comparison of Available Structures

1. Allocation of responsibility

2. Authority objectives

3. Resource investment

4. Authority regulation

5. Combination structures

C. Comparison of Financing Structures

1. Cost

2. Flexibility of structure

3. Control

4. Need for government supervision

5. Complexity of structure

6. Security

7. Need for existing business

8. State aid restrictions

9. Balance sheet treatment

10. Comparative analysis

D. The Pros and Cons of Concessions

1. What is a concession?

2. Why water projects often require concessions

a. Investment in distribution

b. Improving management of the sector

c. Relationships with consumers

d. Political insulation

e. Comprehensive solution

3. Problems with concessions

a. Future expansion

b. Existing assets

c. Existing business

d. Decision making

e. Loss of control by the public sector

f. Tariff levels and payments

4. Challenges in financing concessions

a. Existing income stream

c. Scope of works.

d. Future works financing and shared security

Chapter 4 Regulating the Private Sector

A. Scope of Regulatory Framework

1. Price

2. Service standards

3. Decision-making process

4. Sustainable development

5. Independent review

6. Competition

7. Social, cultural and political context

B. Structure of the Regulatory Framework

1. Contract

a. Applicable law

b. Regulation

c. Change in law or regulations

2. Legislation

a. Regulation by legislation

b. Application of legislation

c. The cost of compliance

3. Licence

a. Flexibility

b. Sufficiency of recourse

c. Nature of the licence

d. Further licence requirements

C. The Regulator

1. Supervision

a. Clear mandate

b. Regulator discretion

c. Accountability and judicial review

d. Transparency

2. Independence

3. Consultation

4. Provision of resources

5. Information-gathering

6. Formation

D. Regulatory Standards

1. Water quality

a. Drinking water

b. Industrial water

c. Untreated water

2. Water pressure

3. Unaccounted-for water

a. The impact of unaccounted-for water

b. The regulation of unaccounted-for water

4. Leakage reduction

a. The benefits of leakage reduction

b. A drawback of leakage reduction

c. The extent of reduction

d. Reduction strategies

5. Metering

6. Illegal connection

7. Continuity of service

8. Capacity and location of waste water treatment

9. Standard to which waste water must be treated

a. Effluent

b. Sludge and other discharge

10. Customer care

a. Standards of care

b. Consumer contracts

11. Reporting requirements

12. Tariff

a. Rate of return calculation

i. Calculation of operating costs

ii. Calculation of capital investment

b. Price control

13. Restriction of asset disposal and insolvency

14. Competition.

Chapter 5 Government Finance

A. The Nature of Government Financing

1. Types available

a. Subsidy

b. Tax break

c. Shadow toll

d. Grant

e. Finance

f. Guarantee of repayment of debt

2. Characteristics

B. Cornrnercial Concerns

1. Property rights and environmental considerations

2. The status of permits and licences

3. The condition of existing assets

4. Warranties provided by contractors and suppliers

5. The amount of other funds invested

6. Funding cornrnitted by shareholders of the project company

7. Quality of design and construction

8. Technical viability of the construction prograrnrne

9. Proposals for project management and technical monitoring

10. Intercreditor relationships with other lenders

11. Development of new technology

12. Availability of contingency funding

13. The commercial viability of the project

14. Reliability of financial projections

15. Market research

16. Advance marketing

17. Staff and labour considerations

C. Political Concerns

1. Benefit to local cornrnunity

2. Relations with local trade unions and labour organisations

3. Use of local services, suppliers and subcontractors

4. Local, regional and national development plans

5. Actual benefit to the public

6. Improvement of local know-how and technology

7. Development oflocal capital markets and financial institutions

8. Development of local insurance industry

9. Strategic value in view of political considerations

D. Terms of Grant

1. Conditions to drawdown of grant

a. Cash flow forecasts and applicable ratios

b. Submission of the agreed documentation

c. Compliance with the agreed cost plan

d. Other works

2. Restrictions on procurement

3. Project management

4. Property

5. Security

6. Government monitoring of project progress.

E. State Aid

1. What is state aid?

a. Aid

b. State

c. Distortion of competition

d. Aid to the borrower

e. Aid to the lender

f. Amount of aid

g. Percentage of aid

2. Consequences

3. Notification and other risk management

Chapter 6 Project Finance

A. The Contractual Structure

B. Lender Recourse

1. Recourse, limited recourse and non-recourse financing

a. Full recourse

b. Non-recourse

c. Limited recourse

d. Security issues

2. Loss of non-recourse treatment

3. Rights against other persons

C. Drawdown and Repayment of Debt

1. Construction phase

2. Operation phase

3. Repayment schedule

4. Project accounts

D. Other Project Finance Issues

1. Conditions precedent

2. Security issues

3. Repayment

4. Shareholder support

5. Step-in rights

a. Cure rights

b. Step-in rights

c. Novation

6. Warranties, undertakings and representations

7. Use of insurance

E. Bankability

1. Financial viability

a. Debt:equity ratios

b. Debt service cover ratios (DSCR)

c. Loan life cover ratios (LLCR)

2. Political stability

a. PoIitical intervention

b. Currency issues

3. Legal stability

4. Technical viability

5. Environmental viability

Chapter 7 Principles of Risk Allocation for Project Financing

A. Project Financing and Risk

B. Completion Risk

1. Single point responsibility

a. Design

b. Coordination

c. Completion

d. Contractor's claims

2. Time for completion

3. Cost of completion

C. Performance Risk

1. Design and construction

2. Operation

3. Bulk purchaser infrastructure

4. Raw water and other supply

D. Operation Risk

1. Scope of operation risk

2. Associated infrastructure

3. Training and transfer of know-how

4. Transfer

E. Political Risk

1. Ultra vires.

2. Change in budget, government, or political atmosphere.

Notes:

Includes index.

Description based on print version record.

Description based on publisher supplied metadata and other sources.

Other Format:

Print version: Delmon, Jeffrey Water Projects

ISBN:

9789004479166

OCLC:

1291314895