TY - JOUR T1 - How Contract Rights and Public Sector Governance Affect Infrastructure Investment JF - The Journal of Structured Finance SP - 90 LP - 94 DO - 10.3905/jsf.2006.628547 VL - 12 IS - 1 AU - Rommel C. Gavieta Y1 - 2006/04/30 UR - https://pm-research.com/content/12/1/90.abstract N2 - Contract enforcement risk has become more prevalent in build-operate-transfer (BOT) projects. Recent trends in Southeast Asia have shown that non-enforcement of contract rights by the public sector have common characteristics such as: introduction of competitors into a contractual relationship believed to have been already awarded as a monopoly, opportunistic behavior of a public-sector joint venture partner, and attempts to void or renegotiate a contract on the grounds that it provides excessive profit to the private sector. The Philippines, in particular, traces non-enforcement of contract rights back to weak enforcement of property rights. The author's recommendations for the Philippines include the establishment of a private-sector investment fund by a multilateral agency, from which amounts could be drawn while disputes between the sovereign and the private sector were under settlement in the International Commerce Court; the formation of a bureau for monitoring official development assistance (ODA) and BOT projects by a multilateral agency; the assumption by equity investors of debt positions in their projects to ensure pari passu status with other lenders in negotiations with the sovereign; and empowerment of the informal sector to promote contract rights enforcement.TOPICS: Project finance, emerging markets, exchanges/markets/clearinghouses ER -