A bad PPP Contract

BULK WATER SUPPLY PUBLIC-PRIVATE PARTNERSHIP (PPP) CONTRACT

THIS AGREEMENT is made this day of [Date], by and between the Government of Indonesia, represented by the Ministry of Public Works and Housing (hereinafter referred to as the "Government"), and [Financier's Name], a company incorporated under the laws of [Country] (hereinafter referred to as the "Financier").

WHEREAS, the Government desires to develop a bulk water supply system in Eastern Java (the "Project") and has chosen to do so through a Public-Private Partnership (PPP);

WHEREAS, the Financier has agreed to finance, design, construct, operate, and maintain the Project;

NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

ARTICLE 1: PROJECT DESCRIPTION

The Project involves the design, construction, financing, operation, and maintenance of a bulk water supply system in Eastern Java.

ARTICLE 2: FINANCIAL TERMS

The Financier will provide the entire capital required for the Project. The Government will not provide any financial support or guarantees.

ARTICLE 3: RISK ALLOCATION

All risks related to the Project, including but not limited to construction risks, operational risks, financial risks, and environmental risks, will be borne by the Financier.

ARTICLE 4: REVENUE SHARING

The Government will receive 80% of the revenues from the Project, while the Financier will receive 20%.

ARTICLE 5: TERMINATION

The Government has the right to terminate the contract at any time without any compensation to the Financier.

ARTICLE 6: DISPUTE RESOLUTION

Any disputes arising out of or in connection with this contract will be resolved by arbitration in a location chosen by the Government.

ARTICLE 7: GOVERNING LAW

This contract will be governed by the laws of Indonesia.

ARTICLE 8: DEVELOPMENT, BIDDING, AND ONGOING COSTS

The Financier acknowledges that the costs associated with the development, bidding, and ongoing operation of the Project may be greater than traditional government procurement processes.

ARTICLE 9: COST OF DEBT

The Financier acknowledges that the cost of debt for the Project will be borne by the customers or the Government through subsidies, as determined by the Government.

ARTICLE 10: PROJECT VIABILITY

The Financier acknowledges that the viability of the Project is dependent on various factors, including the technology involved, the extent of the private sector's obligations and liability, and the need for significant tariff increases to make the Project viable.

ARTICLE 11: PERFORMANCE REQUIREMENTS

The Financier agrees to meet the performance requirements as set out in Schedule A to this contract. The Financier acknowledges that failure to meet these requirements may result in penalties as determined by the Government.

ARTICLE 12: GOVERNMENT RESPONSIBILITY

The Government retains the responsibility for the quality of utility services provided under the Project. The Government also retains the right to monitor the performance of the Financier and enforce its obligations under this contract.

ARTICLE 13: LEGAL AND REGULATORY FRAMEWORK

The Financier acknowledges that the Project is subject to the legal and regulatory framework of Indonesia, as may be amended from time to time.

ARTICLE 14: UNANTICIPATED CONTINGENCIES

The Financier acknowledges that due to the long-term nature and complexity of the Project, all possible contingencies during project development may not be identifiable. The Financier agrees to cooperate with the Government in good faith to address any events and issues that may arise that were not anticipated in this contract.

ARTICLE 15: ENTIRE AGREEMENT

This contract, including any schedules attached hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, between the parties.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

[Government Representative] [Financier's Representative]