The creation of a commercial vehicle/project (SPV) is an essential feature of most PPPs. The SPV is a legal entity that carries out a project. All contractual agreements between the various parties are negotiated between them and the SPV. VPPs are also a preferred way of implementing P3s in limited-capital or non-refundable situations, where lenders depend on cash flow and project security as the only way to repay their debts. The following figure shows a simplified PPP structure. However, the actual structure of a PPP depends on the nature of the partnerships. Funding the ppp through project financing means that sponsors need protection from ppp risks. They require a limited appeal structure involving the creation of an SPV. All or most of the ppp project risks outlined in the project agreement are covered by the construction contractors and D-M. These contractors take responsibility for the risks associated with the PPP project by « passing » through the SPV the obligations they assume with the public procurement authority as part of the project agreement. A destination/project vehicle (SPV) is a legal person carrying out a project.
All contractual agreements between the various parties are negotiated between them and the SPV. An SPV is a commercial company created by an agreement (also known as the association protocol) between shareholders or sponsors, in accordance with the corresponding law of a country. The shareholders` pact defines the basis of a company`s incorporation and contains information such as name, ownership structure, management control and social affairs, authorized social capital and the amount of debts of its members. The SPV concludes the project agreement, receives investor funds and contracts with construction contractors and O-M. All of these activities illustrate the key role of the VPS. The consortium will be aware of its key role during the tendering phase and in training within the SPV. As a result, it places an essential responsibility on the consortium to ensure that the P3 project is structured to protect its interests. The founding documents of the SPV will include the « memory and statutes » of the SPV and the shareholders` pact.
See Figure 6A.9. There is often a direct link between one of SPV`s shareholders and the construction contractors and/or D-M. If such a relationship exists, the relationship must be managed carefully, as there is a potential conflict of interest between the interests of the SPV shareholder and the associated contractor. In practice, this could mean that one of the SPV shareholders may not be able to agree with the remaining VPS shareholders to accept a clause in the project agreement, as he knows that his bound contractor will not be able to fulfill the commitment.