A fully fulfilled operation and maintenance agreement is an agreement in which all obligations and responsibilities for the operation and maintenance of the project are clearly transferred to the operator and the project company and project promoters have a direct line of recourse to the operator. For example, suppose that important aspects of the operation and maintenance of the facility (especially those that may affect the performance of the facility) are performed by a third party under another agreement. Operations and maintenance contracts must refer to all levels of performance achieved by the EPC contractor at the time of delivery. Those established levels, adapted to deterioration, should form the basis of the operator`s performance obligations. For example, for an energy project, it is imperative that technical and legal advisors ensure that the performance tests and performance guarantee, as well as the flat-rate compensation plans of the agreement, comply with the corresponding schedules of the construction contract. The description of the operator`s tasks is often complex and requires significant project management and technical expertise. A simpler approach is to describe the operator`s requirements in general and link them to the performance outcomes required by the agreement and include everything necessary and ancillary to that delivery. The D&E agreement should contain provisions that set out in as much detail as possible the consequences of a breach by the operator of its performance obligations, including lump sum damages or other financial damages. In most cases, operations and maintenance contracts set minimum performance levels below which the operator is deemed to have breached the agreement, as well as the options and remedies available to the owner. If this agreement is provided for by the project proponent, it must be addressed in the shareholders` agreement by and between the project participants and in the loan documents.

Although this agreement would seriously affect the bankability of the project. Operations and maintenance contracts establish contractual agreements between project companies and professional operators for the maintenance and operation of project facilities. Operations and maintenance contracts (operations and maintenance agreements) are usually short-term contracts lasting two to five years that establish a contractual agreement between the project company and a professional operator to provide operation and maintenance services for the project. They determine the extent of the operator`s duties and responsibilities, as well as the remuneration, which is usually a fixed fee. Operations and maintenance agreements sometimes also provide for performance-related costs and, conversely, lump sum remuneration in the event of non-compliance with the required performance benchmarks. 2. Operator Obligations: Some common obligations of an operator in a contract for the operation and maintenance of a water supply facility are as follows: Operations and maintenance agreements should specify the operator`s performance obligations, if any. Performance criteria typically include elements such as availability, breakdowns, production steps, and other technical performance, quality, safety, and environmental criteria. The agreement should also set out the minimum levels of performance that trigger the owner`s rights to compensation or termination under the agreement if they are not respected.

In some cases, the D&E agreement may also provide for an upward participation mechanism that provides for additional compensation in the event that the performance of the project exceeds the contractually agreed level. Operations and maintenance contracts mean operation and maintenance contracts, as the name suggests, it is a contract between a company with a plan/project developed in hand and an independent person or organization with the expertise and ability to effectively execute such a plan/project in reality. It has a similarity with event management operations between the parties. Operations and maintenance projects can mainly be seen in government projects awarded to an independent contractor based on the submitted bid, operations and maintenance agreements usually refer to projects such as road projects, electricity maintenance projects, water and wastewater projects. O&M agreements are quite comprehensive and detailed, this article provides a summary of the clauses often found in an O&M contract, with the rapid expansion of civilization and the daily appearance of some O&M agreements, it is necessary for a corporate lawyer to familiarize himself with the basics of such agreements. Contractual clauses such as these are called non-discharge and horizontal defence provisions. These provisions may be incorporated into O&M agreements, which should also result in them also being included in EPC contracts or otherwise in a separate coordination or envelope agreement defining the coordination and interface obligations of the parties with respect to the project. If the operator and the EPC contractor are the same or related companies, the agreement should prevent one from relying on a delay or under-performance of the other to obtain an exemption from the owner from its contract. The agreement should also prevent a contractor from relying on the actions of the other as a defense against a claim by the owner for delay or non-performance. Lump sum damages are financial compensation for a loss, disadvantage or breach by a party to an agreement granted by a contractual provision on the breach of the agreement.

Contracts or agreements that involve the exchange of money or the value proposition, such as operations and maintenance contracts. B, often include a provision for lump-sum damages. The purpose of a lump-sum compensation provision is to determine a predetermined amount to be paid if a party fails to fulfill the agreed order. Lump sum damages can only be assessed in a contract if (1) the damage is uncertain or difficult to quantify; (2) the amount is reasonable and takes into account the actual or foreseeable damage caused by the breach, the difficulty of proving the actual damage and the difficulty of finding another reasonable remedy; and (3) the damage is structured to act as compensation rather than punishment. If these criteria are not met, a lump sum compensation clause is void [...].