Donald Warnock - rail projects in kuwait construction and operational issues
1. FINANCIAL INSTITUTIONS ENERGY INFRASTRUCTURE AND COMMODITIES TRANSPORT TECHNOLOGY
Rail Projects in Kuwait
Construction and Operational issues
Donald Warnock
Partner
Norton Rose LLP
20 April 2011
2. Introduction and Background
• Partner in construction / engineering group dealing
with non-contentious and contentious issues.
• Significant experience of all forms of construction
contract, including bespoke contracts.
• Recently completed a 2 year secondment to Tube
Lines (London) as acting General Counsel. Tube
Lines are responsible for the upgrade and
maintenance of the Jubilee, Northern and
Piccadilly lines under the PPP Contract with
London Underground Limited.
3. Kuwait Projects
• Kuwait Metro Rail PPP
- 2 to 4 lines (US$6 to 12 billion)
- lines to be tendered separately
- advisory team in place
- Build Operate Transfer (BOT) structure
• Kuwait Rail Road Systems PPP
- heavy rail
- will be part of the wider GCC network
6. Pass Through & Equivalent Project Risk
• Pass Through
– Principal Risks for SPV
– Principal Options for risk transfer
• Equivalent Project Relief
– What is it and when is it applied
– EPR clauses
7. Risks retained by SPV
• Mismatch of liability caps
• Insurance
• Non-fault risk
• Principal contractor interface
• Consequential loss
• Authority change
• Law change
• SPV shareholders action/inaction
8. Risks retained by SPV cont.
• Indices differentiation
• Law change (O&M phase)
• Market testing
• Defects Liability
• Fare revenue/ridership shortfall
9. Insurance / risk transfer
• Project specific requirements – insurance advisers
• Construction all risks / material damage, third
party liability, professional indemnity, business
interruption cover (to cover loss of revenue for
insured events), advance loss of profits
insurance / delay in start up insurance
• Premium costs and risk sharing
10. Limitations on liability – scope and nature
• Overall liability capped
– Building contractor
– O&M contractor
• Principle behind liability/limitation
• Insurance
• Effect on contract sum
• Examples of exclusions
12. Presentation
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responsibility, or has any liability, to any person in respect of this presentation.
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employee of Norton Rose LLP or one of its respective affiliates with equivalent standing and qualifications.
4 This presentation contains information confidential to Norton Rose Group. Copyright in the materials is owned
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express authorisation of Norton Rose Group
5 This presentation is not intended to give legal advice and, accordingly, it should not be relied upon. It should
not be regarded as a comprehensive statement of the law and practice in this area. Readers must take specific
legal advice on any particular matter which concerns them. If you require any advice or information, please
speak to your usual contact at Norton Rose Group.