Session 8 Domenico Ferrari

7/25/2019 Session 8 Domenico Ferrari

1/34

Project Financing Issuesin TOD Infrastructure Projects

Domenico FerrariSenior Associate


2/34

Nabarro and Singapore

Nabarro Singapore focuses primarily on two areas of practice,

Infrastructure and International Arbitration Infrastructure

Proiding integrated e!pertise in bot" contentious and non#contentious $transactional% wor&, we can adise on any aspect of amajor infrastructure project at any point in its life'

(e adise clients at project inception, on procurement strategy, not only from a legal and commercial perspectie, but also to pre#empt and manage any disputes t"at may arise during t"e process' (e adise during procurement and at completion, w"ere manydisputes arise'

Our particular strengt"s are in t"e following sectors, w"ere we "ae wor&ed wit" clients to our mutual benefit)

Ons"ore and offs"ore serices for t"e oil and gas industry* +pstream -P enture funding, joint entures and inestments.* production s"aring agreements.* farm#in and joint operation agreements.* FD and detailed design and construction of terminals.* P/ new#build, conersion and upgrading of drill#s"ips, jacups and semi#submersibles and FPSOs.* construction of offs"ore oil and gas processing facilities.* well serices including well decommissioning.* sub#sea support infrastructure serices including pipeline and cable laying. and,

* petroc"emical production and tan&ing facilities'

0arine ciil engineering* Dredging and reclamation.* port deelopment.* coastal defences. and* trenc"ing'


3/34


Ons"ore infrastructure and ciil engineering* 1oads.* rail. and* eart"wor&s'

Power and utilities* //2T plants.* coal#fired power plants.* "ydroelectric power plants.* energy from waste.* solar P3S plants.* wind power production facilities.* desalination and water treatment plants. and,* sewage and industrial effluent treatment plants'

/ommercial real estate deelopment* 4arge scale office, retail and leisure deelopments. and* fit#out

(e "ae enjoyed wor&ing wit" our clients on projects t"roug"out t"e region, including Australia, India, Indonesia, 0alaysia, /"ina,5ong 6ong, Sout" 6orea, Sri 4an&a, Taiwan, T"ailand, 3ietnam, offs"ore Timor and offs"ore PN2 as well as Singapore'

Our Singapore#based partners also "ae e!perience of projects in urope, Africa and t"e 0iddle ast'

(e "ae deeloped a networ& of relations"ips wit" first#rate local counsel in ot"er jurisdictions and, w"ere appropriate, we teamup wit" t"em to delier a seamless serice to our clients'


4/34


International Arbitration

Our partners "ae strong trac& records in international arbitration, wit" e!perience of arbitration under t"e

major institutional rules, including SIA/, I//, 4/IA, 56IA/, /ITA/, SIA, S// and +N/IT1A4' (e also

"elp clients engaged on international projects to resole t"eir disputes t"roug" alternatie disputeresolution, including mediations, e!pert determinations, adjudications and dispute boards'

Naturally, t"e bul& of our cases in international arbitration "ae related to infrastructure projects' 5oweer,

our clients are increasingly as&ing us to apply our s&ill sets to t"e arbitration of disputes arising out of ot"er

&inds of transactions, including cross#border inestments in t"e mining sector and comple! design and

licensing of IT products. as well as a ariety of upstream agreements in t"e oil and gas industry'


5/34


6/34

TOD Infrastructure/"allenges

Scale, comple!ity and land assembly issues

Design c"allenges of ertical mi!ed#use deelopment

/onstruction c"allenges of ertical mi!ed#use deelopment

0i!ed#uses not always lucratie $mar&et ris&%

Sponsors need capital t"at is more ris& tolerant

4imited sources of permanent financing

4onger deelopment timelines and "ig"er carrying costs


7/34

1econciling Parties7 Objecties("o wants w"at8

T"e 5ost 2oernment

Satisfy national interest and "ae t"e project completed to t"e

re9uired specifications as soon as possible

Ac"iee better :alue for money; t"an would be t"e case if t"egoernment procured t"e project in a conentional manner


8/34


T"e Priate Sector Sponsors

To satisfy a strategic corporate objectie by completing t"e

project $e.g.diersify into anot"er related area of actiity%

To e!tract a profit $in arious ways% To limit=s"are t"e ris& in carrying out a project

To carry out a project :off balance sheet;

To retain control of t"e project for as long as possible in times of

"ards"ip


9/34


T"e 4enders

To ma&e profits

To assume only measurable or measured ris&s

To "ae control oer &ey project decisions

To ta&e control of t"e project as soon as possible in times of

"ards"ip


10/34

A Typical Project Finance Structure

Image: http://youssef-serghini.weebly.com/parties-to-a-project-financing.html
http://youssef-serghini.weebly.com/parties-to-a-project-financing.htmlhttp://youssef-serghini.weebly.com/parties-to-a-project-financing.htmlhttp://youssef-serghini.weebly.com/parties-to-a-project-financing.html


11/34

Deal P"ilosop"yT"e :


12/34



13/34



14/34


15/34


16/34


17/34


18/34


19/34


20/34


21/34

/onstruction /ontractsBuic& Oeriew

5ow will t"e construction arrangements be structured8

:Turn&ey; $one contractor responsible for all t"e wor&s%

Indiidual contractors wit" separate contracts subject to controlof an oerall project manager $w"o enters a project

management agreement wit" t"e employer% ? P/0 structure

/onstruction /onsortium $wit" joint and seerable liability on

part of all its members%


22/34

/onstruction /ontractsIssues to be addressed

("o is responsible for t"e design of t"e wor&s8

Is t"ere a fi!ed price for t"e wor&s8

Is t"ere a fi!ed date for completion of t"e wor&s8

5ow is completion determined8 ("at are its conse9uences8

Are li9uidated damages payable for delay in ac"ieing completion8 5ow is t"e contract price to be paid8

("en do title and ris& pass8

Are t"e contractor7s obligations to be bonded8

("at warranties does t"e contractor gie8 Is t"ere a defects period8

("at are t"e insurance arrangements8 ("at is t"e position wit" regard to unforeseen ground ris&8

("o is responsible for obtaining w"at consents8

/an t"e employer terminate t"e construction contract8


23/34

Can you take itto the bank?


24/34

:


25/34


26/34


27/34


28/34


29/34


30/34


31/34


32/34


33/34


34/34

Session 8 Domenico Ferrari

Documents

Transcript of Session 8 Domenico Ferrari