Land Availability Agreement Template

The country can be the site of the construction of a social facility or a processing facility (for example. B a wastewater treatment plant), or it may be transportation infrastructure (e.g. B stations in a railway project, depots in an urban train). It may also be a „right of priority,“ that is, the corridor on which a new road or highway or railway line is located. In this sense, it is good practice for the Authority to directly manage the acquisition of land, but in some countries the private partner can do so under delegation. In such cases, it is of the utmost importance that the Authority maintains the risk (and reward), i.e. that it directly assumes the final costs of the acquisition and the consequences of possible delays. However, in most cases, this is not the case. In such cases, land must be acquired.

This is particularly complex in linear infrastructure, such as roads and railways, where there may be multiple owners. Normally, the title to the land remains in the hands of the authority which, through the contract, gives the private partner the legal right to use the land for the construction and management of infrastructure assets (for example. B, a lease or a concession). As a general rule, the Authority is the only party entitled to expropriate the land of existing landowners, although in some countries this power may be delegated to the private partner (which gives it the title of beneficiary of the expropriation). See below. If the Authority maintains the risks and direct management of the expropriation process (for example. B road projects in Mexico or Nigeria), it is common and good practice is to tender only if a significant part of the land is already acquired and available, since the probability of delay in the acquisition plan is considerable, regardless of the direct assumption of costs (and therefore the risk of cost) by the Authority. There is therefore a risk of delays throughout the construction period. Whether the risk of land delay is clearly defined in the treaties as a discharge or even compensation event will pose conflicts and problems in such situations. These can be avoided if the acquisition program has advanced significantly when the contract is signed (or even tendered). The land or site of the asset may already be available, or it is in the hands of the Authority and can be used.

If the country is not available at the time of commercial closure, as is the case with linear infrastructure projects, there is a risk in terms of both costs and time, as it is obvious that construction can only progress when the land is available. Estimating the cost of acquisition (particularly for several owners) is very complex and uncertain and, in many countries, it is common for the final price to be determined by a court (most often in civil code countries).

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