June 2002
Beginner
344 pages
11h 7m
English
Content preview from Principles of Project Finance
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Even if there is a dispute, the EPC Contractor is required to keep working on
the project.
§7.2 OPERATION AND MAINTENANCE CONTRACT(S)
An O&M Contract helps to ensure that project O&M costs stay within budget
and that the project operates as projected. Because the Project Company has no
track record of operating at the beginning of a project, lenders often prefer estab-
lished companies, with the necessary experience of similar projects as well as
more financial substance, to take this responsibility.
Even if the project is going to be operated by one of its Sponsors (a fairly com-
mon scenario), a separate agreement for this purpose is necessary, to define the
scope of the Sponsor’s involvement.
§7.2.1 S
COPE OF
C
ONTRACT
O&M may be dealt with under one contract ...
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