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The US-Israel Legal Review 2019 37
By doing so, the State (through the public agency)
intends to perform the respective large-scale
infrastructure project in a relatively efficient
manner and deliver a higher quality infrastructure
facility to the public, with fewer risks (and
accordingly, costs).
In this paper I will briefly introduce some of
the most common major risks in the PPP/PFI/
BOT projects field, and provide examples of the
measures which may be taken to mitigate them,
which shall be assessed and addressed in the
respective BOT/concession agreements with the
governmental entity.
General risks (to be assumed fully/partially
by the State) which are to be incorporated and
addressed properly in the respective contracts:
• Access to the Site
– The State remains the owner
of the site during the concession period and
therefore must take all the actions required for
granting the Concessionaire an uninterrupted
and continuous access to the Site. The respective
agreement with the State shall incorporate an
appropriate mechanism addressing the event of
delays in issuance of a notice to proceed.
• Unforeseeable Soil Conditions/Findings &
Antiquities
– Since the State is the sole owner of
the site, in the event of discovering archeological
findings and/or antiquities that might cause a
suspension of the works in the project, the State
should bear the residual risk and provide certain
remedies, e.g., indemnification for direct costs,
schedule extension, etc.
• ChangeinLaw
–Oneofthemainconcernsshared
by both the Concessionaire, its contractors
and by the project’s Lenders is the risk that the
applicable laws and regulations may change
following the bid submission and adversely
affect the performance of the works within the
project. The State provides various protections
and remedies in cases where the change was
not foreseeable at the time of entering into the
contract, and to the extent that the change is
associated with additional costs and/or losses
to the Concessionaire. The adverse impact of
such change in law on the respective project
shall be evaluated on a case by case basis.
• Change Orders
– In the event of an increase
and/or amendment to the scope of work defined
in the Concession Agreement, an additional
payment due to the Concessionaire is required.
For such purpose, the Concession Agreement
shall provide for a clear mechanism for the
additional payment and the limitations thereto.
• Unjustified Suspension/Interruption
(for
reasons not attributable to the Concessionaire)
– Since the State has the ability to suspend the
works in the project, in case of an unjustified
suspension/interruption, the State should bear
the residual risk, and provide certain remedies,
NADIA DAVIDZON
PARTNER
The State provides various
protections and remedies in cases
where the change in lawwas not
forseeable at the time of entering
into the contract.