The Vital Role of Law Firms in Public-Private Partnerships Driving Panama’s Infrastructure
Public-Private Partnerships (PPPs) have become a cornerstone for developing critical infrastructure in Panama, merging state resources with private sector expertise. Law 93 of 2019, regulated by Executive Decree 840 of 2020, provides a robust legal framework for these collaborations, where law firms play an indispensable role.
Key Functions of Law Firms in PPPs
Legal Structuring:
Draft contracts balancing risks and responsibilities between the state and private entities.
Ensure compliance with local and international regulations (e.g., environmental, labor standards).
Risk Mitigation:
Identify potential conflicts, such as regulatory changes or timeline breaches.
Negotiate force majeure clauses and dispute resolution mechanisms.
Financing and Guarantees:
Advise on trust structures and co-financing models.
Review agreements with financial institutions to ensure transparent payment flows.
Common PPP Challenges
Contractual Complexity:
Ambiguous interpretation of technical or financial clauses.
Bureaucratic Rigidity:
Delays in state approvals or unilateral contract modifications.
Fiscal Sustainability:
Ensuring projects do not strain public budgets long-term.
Recommendations for Companies
Thorough Due Diligence:
Assess political, financial, and operational risks before entering a PPP.
Multidisciplinary Collaboration:
Engage lawyers, engineers, and tax consultants from the design phase.