Infrastructure and Public-Private Partnerships

We support infrastructure projects and collaborations between public authorities and private partners — from project structuring to procurement and financing, up to operation and retransfer.

What holds an infrastructure project together

A project of this kind does not consist of a single contract, but rather a web: the project contract with the public client, the construction and supply contracts, the operation and maintenance contracts, the financing contracts, and the securities. These levels must fit together — especially regarding deadlines, liability, and termination rights.

The most common construction error is the risk gap: The project contract commits to a deadline that the construction contract does not secure, or it provides for a contractual penalty that has no counterpart in the subcontractor agreement. Therefore, we never review the contracts individually, but rather in relation to each other.

Who bears which risk

The fundamental question of any public-private partnership is: Who bears which risk? Construction costs and construction time typically belong to the private partner, as they can control them. The demand or availability risk is negotiable and determines the model. Political risks, changes in the legal situation, and land acquisition typically remain with the public side.

A clear allocation is not an end in itself: Risks that the private partner cannot influence are priced in — and with a markup. A shift at any cost makes the project more expensive, not safer.

Procurement

Complex projects are rarely awarded in an open procedure. Negotiation procedures and competitive dialogues allow for the development of the solution during the process — but require discipline: equal treatment of all bidders, documentation of each negotiation round, clear award criteria from the outset. Anyone who changes the weighting afterwards risks the procedure.

For bidders, this means significant effort over a long period. We clarify early on whether a compensation for expenses is provided, whether alternative bids are allowed, and how to handle intellectual property rights for submitted concepts.

Construction and Operation

In the construction phase, the handling of changes determines the outcome. Every project experiences orders that deviate from the original performance specifications; the contract must regulate how this leads to a claim for additional compensation and extension of deadlines. In the absence of an orderly procedure, a convoluted mass of unresolved amendments arises at the end of construction — leading to a lawsuit.

In operation, the focus shifts to performance measurement: availabilities, response times, quality standards. These key figures must be objectively measurable and linked to a compensation system that assesses deductions moderately. A deduction system that reacts sensitively to minor deviations creates disputes instead of quality.

Financing and Securities

Project financing relies on the cash flow of the project, not on the creditworthiness of the participants. The financing banks require a package of securities and entry rights: if the private partner encounters difficulties, they should be able to continue the project instead of witnessing its failure. These rights must be coordinated with the public client; otherwise, they will be ineffective.

We negotiate the direct contracts between the client and the financiers and coordinate securities, termination rights, and compensation regulations.

The End of the Project

At the end of the contract, the retransfer takes place. This is typically conflict-prone, as expectations regarding the condition of the facility differ. A robust contract establishes the handover standards from the outset, provides for a condition assessment before the end of the contract, and regulates who pays for repairs that become due only after the handover.

Typical Configurations

The foreign construction contractor. A Turkish construction company applies for a German project. In addition to suitability certificates and references, the posting of workers, reporting obligations, and the question of when a taxable permanent establishment arises must be clarified. For longer construction periods, it typically arises.

The consortium. Several companies pool their services. The internal relationships — division of tasks, liability compensation, external representation — belong in a consortium agreement that is established before the submission of the bid. Towards the client, the partners are usually jointly liable; those who have not arranged anything internally may ultimately bear the mistakes of others.

The contract adjustment. With terms exceeding twenty years, framework conditions change. Without an adjustment mechanism for legal changes, price developments, and technological progress, the contract becomes unusable over time — for both parties.

What this consultation is related to

Infrastructure projects touch on procurement law, construction and real estate law, public sector approval procedures, and, in the case of foreign investors' involvement, investment law. We bring these strands together in a project structure.