NETHERLANDS Law and Practice Contributed by: Eduard Scheenstra, Etiënne Courbois and Jenny Noordermeer, CMS
in an open-book, collaborative environment to develop the design, clarify the project scope, and identify and assess risks. This allows for joint exploration of solutions and the establishment of a realistic budget based on actual insights. Only after sufficient clarity is achieved do the parties proceed to the second phase, where the contractor executes the works under a more traditional con- tract structure. This model reduces the likelihood of disputes and unforeseen cost overruns, as uncer- tainties are addressed early and collaboratively. • Cost-Plus Contract ( Kost+ Contract ): In a cost- plus contract, the contractor is reimbursed for actual costs incurred, plus an agreed-upon fee or margin. Unlike fixed-price contracts, this model reduces the contractor’s exposure to unforeseen risks and cost overruns. It requires a high degree of transparency and trust between the parties to jointly manage costs and project risks. Cost-plus contracts are particularly suitable for very large and high-risk projects that might otherwise be unattrac- tive to market participants. A notable example is the renovation and partial replacement of the Van Brienenoord Bridge, with a project value of EUR1.5 to 2 billion. Drivers of Change and Market Dynamics The move towards these new PPP models is large- ly a response to current market conditions. With a high volume of available work and significant labour shortages, contractors are in a strong position to be selective about the projects they undertake. They increasingly prefer projects with a lower risk profile and avoid the extensive and rigid risk allocation typi- cal of traditional DBFMO contracts. The new models deliberately shift towards a different or later allocation of risks, with risks more often shared between public and private parties or even assumed by the public authority. This collaborative approach to risk manage- ment is designed to make projects more attractive to contractors in a competitive labour market. A key feature of these models is deferred price forma- tion: rather than fixing the price at the tender stage, the final price is determined later in the process, once more information is available and risks are bet- ter understood. This has significant implications for project financing. Financiers tend to provide full fund-
ing only after project design, pricing, and risk alloca- tion are clarified, often offering limited support in the early phase. They may require additional guarantees or higher interest rates due to early uncertainties, with governments sometimes stepping in to facilitate early financing. As a result, financiers join projects later and more cautiously, while the government’s role in ena- bling early financing increases. In summary, the Dutch PPP market is evolving away from traditional, rigid models towards more flexible, collaborative, and risk-sharing partnership structures. This evolution is driven by ample work opportunities, labour shortages, and the need for more attractive risk profiles for contractors. The new models are char- acterised by shared risk, greater transparency, and deferred pricing mechanisms, which together foster a more sustainable and efficient approach to public In practice, most project documents are governed by Dutch law. For electricity, and the exploration and mining of minerals, specific statutory provisions apply. Electricity Contracts pertaining to the supply or transport of electricity (eg, PPAs/supply agreements and connec- tion and transport agreements) must be governed by Dutch law pursuant to the Electricity Act 1998 ( Elek- triciteitswet 1998 ). The Dutch courts have exclusive jurisdiction to settle any disputes under these agree- ments. Any provision that stipulates otherwise is null and void. Exploration Agreement Unless the Minister of Climate and Green Growth determines otherwise, pursuant to the Mining Act ( Mijnbouwwet ) the holders of an exploration permit ( opsporingsvergunning ) and/or mining permit ( win- ningsvergunning ) are required to enter into an explo- ration agreement ( winningsovereenkomst ) and mining agreement ( mijnbouwovereenkomst ) respectively. The Mining Act stipulates that these agreements must be governed by Dutch law. infrastructure delivery. 8.3 Governing Law
422 CHAMBERS.COM
Powered by FlippingBook