Lakshmi N. Williams of Transurban North America, left, and Jennifer A. Mahar of Smith, Pachter, McWhorter PLC.
By Mark Holan, editorial director, ARTBA
Discussing, anticipating, and planning for challenges when forming a team for a public-private partnership (P3) project can save time, money, and other hardships later, two experts told the 11th Annual Law & Regulatory Forum, part of ARTBA’s Transportation Construction Professional Development Week Conference, June 4-6 at the association’s Washington, D.C., offices.
Lakshmi N. Williams, general counsel at Transurban North America, and Jennifer A. Mahar, a partner at Smith, Pachter, McWhorter PLC, outlined key ways to create successful concessionaire agreements, which define roles, legal relationships and ownership interests for a diverse group of firms teaming for pursuit of a P3 project. These include:
- Identify the project scope and P3 model, such as Design-Build-Operate-Maintain or Build-Operate-Transfer.
- Seek “dream team” partners for finance, design-build contractor, operations, facility management, and maintenance.
- Determine legal structures and contract vehicles, such as teaming agreements or joint venture.
- Set management and control parameters, such as whether decisions are made by majority or supermajority vote, and how much weight to give minority stakeholders. A simple tip here is to hire a neutral party to record meeting minutes.
- Decide default provisions, including notice and cure period, and consequences for default.
- Confirm confidentiality provisions.
- Agree on risk allocations.
- Specify project close out provisions, such as disposal of assets, audit rights, and record storage.
Don’t fall into the trap of delaying tough decisions until later in the project, Williams and Mahar concluded. Frequent communication, building trust, and requiring transparency are keys to successful projects that are best established from the outset.
More great information about P3s will be available at ARTBA’s 31st Annual Public-Private Partnerships (P3s) in Transportation Conference, July 17-19 in Washington, D.C. Learn more and register at artbap3.org.