The Construction Operating Agreement is a specialized contract used in Indonesia when a project requires integrated management of both construction and operational phases. It is particularly relevant for complex infrastructure, industrial, or commercial projects where the same entity or related entities handle both construction and subsequent operation. The agreement must comply with Indonesian law, particularly Law No. 2 of 2017 on Construction Services, and addresses crucial elements including construction standards, operational requirements, risk allocation, regulatory compliance, and performance metrics. This document type is commonly used in projects requiring continuity between construction and operation phases, ensuring smooth transition and clear accountability throughout the project lifecycle. It incorporates specific Indonesian regulatory requirements including local content provisions, environmental compliance, and necessary permits and licenses.
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1. Parties: Identification of the contracting parties, including their legal status and registration details
2. Background: Context of the agreement, project overview, and parties' intentions
3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement
4. Scope of Work: Detailed description of construction and operational services to be provided
5. Term and Extensions: Duration of the agreement and conditions for extension
6. Construction Requirements: Specific construction standards, methodologies, and compliance requirements
7. Operating Standards: Standards and requirements for facility operation post-construction
8. Permits and Licenses: Requirements for obtaining and maintaining necessary permits
9. Payment Terms: Payment structure, mechanisms, and conditions
10. Performance Security: Requirements for performance bonds and other security arrangements
11. Health, Safety and Environment: HSE requirements and compliance standards
12. Risk and Insurance: Risk allocation and required insurance coverage
13. Force Majeure: Definition and consequences of force majeure events
14. Default and Termination: Events of default and termination procedures
15. Dispute Resolution: Procedures for resolving disputes including jurisdiction choice
1. Foreign Investment Provisions: Required when foreign investment is involved, addressing specific requirements under Indonesian investment law
2. Land Access and Rights: Include when land rights need to be secured or clarified
3. Financing Arrangements: Required when project financing is part of the agreement structure
4. Local Content Requirements: Include when specific local content obligations apply to the project
5. Technology Transfer: Required when technology transfer is part of the project scope
6. Community Development: Include when community development obligations are part of the project requirements
7. Environmental Management Plan: Required for projects with significant environmental impact
8. Change in Law Provisions: Include for long-term agreements to address regulatory changes
1. Technical Specifications: Detailed technical requirements and standards for construction and operation
2. Site Plan and Drawings: Plans, drawings, and technical documentation of the facility
3. Performance Standards: Specific performance metrics and requirements
4. Payment Schedule: Detailed payment terms, milestones, and calculations
5. Equipment and Materials: List of required equipment and materials with specifications
6. Key Personnel: List of key personnel and their qualifications
7. Forms of Certificates: Template certificates for completion, acceptance, etc.
8. Forms of Bonds and Guarantees: Templates for required bonds and guarantees
9. HSE Requirements: Detailed health, safety, and environmental requirements
10. Insurance Requirements: Detailed insurance specifications and coverage requirements
Relevant legal definitions
Clauses
Relevant Industries
Infrastructure
Real Estate
Industrial Manufacturing
Energy
Mining
Healthcare
Education
Transportation
Telecommunications
Hospitality
Retail
Warehousing and Logistics
Relevant Teams
Legal
Operations
Construction
Engineering
Commercial
Procurement
Risk and Compliance
Finance
Health Safety and Environment
Project Controls
Quality Assurance
Relevant Roles
Project Director
Construction Manager
Operations Manager
Legal Counsel
Contract Manager
Chief Engineer
Technical Director
Risk Manager
Compliance Officer
Commercial Manager
Procurement Manager
HSE Manager
Finance Director
Project Control Manager
Quality Assurance Manager
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