1. STEPHENSON HARWOOD Public Private Partnerships for Infrastructure Financing OECD Middle East and North Africa Initiative on Governance and Investment for Development Istanbul - 8 November 2006 Mary Bonar Stephenson Harwood mary.bonar@shlegal.com

2. STEPHENSON HARWOOD Benefits of a PPP Concessions Law Benefit Public Sector PrivateSector BiddersFunders Transparenc y of policy Certainty Government Commitment Clarity and cost control Ring-fenced from general legal framework ?

3. STEPHENSON HARWOOD Pitfalls of a PPP Concessions Law Inflexibility –PPPs vary from sector to sector eg water, transport, energy Incompatibility with the general framework –PPP has to function in local environment eg workforce, supplies, sales Public acceptance not guaranteed –Political issue to be managed eg monopoly rights, non-payment culture Enforcement –Needs to work for government, private sector and general public

4. STEPHENSON HARWOOD Key points about the legal documents Complex structures require many documents Start before the competition not afterwards Documents need to reflect the required or agreed risk allocation Drafting and negotiation should not distort that risk allocation

5. STEPHENSON HARWOOD Outline Structure – parties and legal documents GOVERNMENT SPONSOR CONCESSION VEHICLE EXPORT CREDIT AGENCIES/BANKS INTERNATIONA L FUNDERS LOCAL FUNDERS PPP Concession Contract Direct Agreement Funding Terms Security Documents Equity Documentation SHAREHOLDERS/ PARTICIPANTS INSURERS Subcontracts CONSTRUCTION CONTRACTOR OPERATORMAINTAINER Insurance Contracts Direct Agreements/ Step-in arrangements

6. STEPHENSON HARWOOD Match the documentation to the process Pre CompetitionDevelop competition and evaluation rules, PPP specification, concession principles, government comparator, risk matrix, government policy statements consultation Competition PhaseProcurement notice Prequalification pack Announcement of prequalified bidders Invitation to tender -risk matrix -concession terms/contract -financial model requirements -required bid and variants

7. STEPHENSON HARWOOD Match the documentation to the process - 2 Negotiation Phase Public SectorPrivate Sector Concession AgreementSub-contracts Funder Direct AgreementFunding Documents Security Documents Implementation Phase Approvals Commencement notification/sign-off

8. STEPHENSON HARWOOD Offices AthensAssociated BucharestAssociated Guangzhou Hong Kong JohannesburgAssociated KuwaitAssociated London ParisAssociated Piraeus Shanghai Singapore Mary Bonar Direct Line:+44 (0)20 7809 2061 Direct Fax:+44 (0)20 7003 8255 Email:mary.bonar@shlegal.commary.bonar@shlegal.com Web:www.shlegal.comwww.shlegal.com