Business case
Our client, a private firm, entered into a public-private partnership (PPP) with a public healthcare institution to operate and maintain two hospitals. A dispute arose centred on differing economic interpretations of the formula used to calculate the operator’s annual remuneration.
We demonstrated the importance of joint protection mechanisms in long-term PPP contracts to maintain economic and financial balance over time. We established that macroeconomic risks affecting PPP contracts, such as inflation and exchange rate risk, are highly correlated and should be addressed together. This aligns with the nature of the business, where remuneration was received in USD while most costs were incurred in another currency. A key point during the hearings was to explain in a practical way how inflation works and its impact on compensation.
We prepared two expert reports examining risk allocation in PPPs, key macroeconomic principles, and their interrelation to support the proper interpretation of the formula. We also quantified the correct remuneration.