Pfi Concession Agreement

The retirement model for financing national roads in India is an example of the PFI model. As part of this agreement, a selected private bidder is responsible for developing a section of the motorway and obtaining it over the duration of the contract. The private bidder is compensated for its investments in the project with fixed semi-annual payments. In this approach, the dealer is not obliged to bear the economic risks inherent in the operation of the project. A PFI project includes a 25-year long-term contractual agreement between public and private parties through a concession agreement. There may be separate agreements within the integrated pension team: based on our long experience, we advise our clients on public procurement rules and relevant agreements as well as public financing rules. In addition, we have been actively involved in the design of P3 and concession regulatory systems, as well as in the development of government guidelines. In the Private Financing Initiative (PFI) model, the private sector, like the BOO model, is built, owns and operates a facility. However, the public sector (unlike users in a BOO model) acquires services through a long-term private sector agreement. In any event, PFI projects therefore assume direct financial obligations to the government. In addition, explicit and implied potential liabilities may also result from loan guarantees to lenders and the failure of a public or private body in the case of unsecured loans.

In addition, we advise national and local governments on major airport concession projects and other infrastructure and play an active role in setting market standards for all phases of the concession process, from structuring to contract design. The concession contract transfers only the risks that are most likely to be to the private sector. This means that construction cost overruns and late costs are borne by contractors, financing costs are borne by financial service providers, and service delivery is borne by service providers. All under the aegis of each PFI project. The private sector has shown from experience that it is capable of managing these risks in a very efficient way. There are few, if any, examples of a return to the public sector. No signed projects were saved during the financial crisis and partial deductions for poor services in the industry were very low.