Forming A Consortium Agreements

The implementation of the PPP project requires material construction, operations and maintenance activities. This means that the consortium is usually made up of sponsors representing these interests. In practice, it is normal for the consortium to consist of a contractor, a service provider, an operating and maintenance provider and an identified lender. The importance of the consortium agreement should not be underestimated. This agreement will serve as the basis for the shareholder`s agreement. It will influence the structure and management of private sector projects, as well as the allocation and responsibility for project risk management between unionized parties. It is also common for sponsors to enter into a confidentiality agreement, which means that they undertake to keep each other`s business information confidential at all times. I have met with a large number of bidders, particularly in large-scale government and CPSE projects, who discuss over a long period of time in between, without reaching conclusions. My opinion on whether I should face a chance as a consortium or as a joint venture would be based on pre-qualification criteria and the proposed financial model. Desca (Development of a Simplified Consortium Agreement) is the most popular of several Horizon 2020 consortium agreements.

This is the result of a cooperation project supported by the EC. Its production is a consortium agreement of models that everyone can use as the basis of a specific consortium agreement for a given project. The DesCA model consortium agreement is available for free download. Once the consortium is formed, the next condition for sponsors is to enter into appropriate tender agreements. These will generally take the form of a Memorandum of Understanding or a Memorandum of Understanding (MOU) concluded by the sponsors, in which they state their intention to offer in general exclusively. These agreements may not be binding. However, a more formal and binding agreement, called a « consortium agreement, » can be agreed by sponsors. One of the main challenges of the steering committee is the need to manage and manage disputes between sponsors. Some sponsors may not be 100% coordinated or may not be able to adopt a coherent approach to the risks of the PPP project. These two situations would jeopardize the consortium`s ability to prepare a competitive offer and provide a value price. In order to deal with important decisions and conflicts of interest, it is normal to have the following procedures and mechanisms: what needs to be done to best meet the needs of the consortium members at an early stage, without spending the resources and time before funding is no longer clear? The sponsors create the consortium exclusively for the tender for the PPP project. As we will see below, the consortium will eventually become the SPV that will implement the PPP project.

Sponsors (or their parent companies) often have to provide guarantees or enter into management or service agreements to cover certain debts or risks.