However, in a BOT structure, poor performance has important consequences for government and financiers. The government could have structured its investment program after completing the project (for example.B. would normally have structured the state`s electricity needs on the basis of the electricity project). Although it may be exempted under its take-or pay contract (in fact, these circumstances are generally mentioned in the agreement and in an agreed damages regime), this can nevertheless pose a serious problem. The answer is to decide whether the liquidated damages should be paid to the government authority to ensure that the out-of-service contract is not terminated, which keeps the project on foot, or whether it is paid to the financiers to repay the debt. The first course may be the most advantageous in the long run if a default can be avoided under the offline agreement. During the operating phase, there may be a failure under the operating and maintenance contract, any equipment supply contract and, of course, the start-up contract. The failure of the operating or supply contracts should not be the last for the project. The proponent may have agreed on time frames in which to find alternative suppliers/suppliers that are acceptable to the government authority. However, the failure and subsequent termination of the offline contract is clearly crucial, as cash flow is also made at the close of this document. First, the government authority and the proponent may agree in advance on the date and cost of strengthening the infrastructure for the duration of the agreement.
In this case, the document would detail the sponsor`s upgrade obligations at certain times and at an agreed price. However, it is unlikely that the time and cost of future upgrades can be predicted. Agreements with the contractor and the operator of operations and maintenance must therefore include provisions requiring the developer and the operating and maintenance contractor to comply with this regime. Software development. After being set up by an offshore team, software and systems management services are handed over to their clients for management and distribution. This allows some companies to retain the software and systems maintenance team, as they are already involved in the project. There are a number of variations of the basic BOT model. Under construction company transfer contracts (BOOT), the contractor owns the project during the project period. Under work leasing contracts (LTOs), the government leases the project to the contractor for the duration of the project and implements it. Other variants have to build the contractor project as well as the project.
An example is a DBOT (design-build-operate transfer) contract. The decisive element of the offline agreement from the point of view of the government authority is the performance guarantees that the sponsor must provide. Performance guarantees should address both the quantity and quality of project results and the date on which this benefit is required by the government authority. Finally, as part of this method, the private organization builds and operates for a limited period of time a facility in land leased to the public. As soon as the term of the lease is due, the organization transfers the leased land to the public body to which it belongs. Stamp duty is generally payable on the rent payable or, if the amount is higher, on the rent of the property market, which may be higher than the usual rent of peppercorns. However, for infrastructure projects, leases (or the takeover security agreement) include an obligation for the taker to build the infrastructure. This obligation could lead to the imposition of a stamp duty on the significantly higher value of the property to be built.