Renegotiation

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Renegotiation

• Lessons learned from Infrastructure
• Jeff Delmon
• Infrastructure, Economics and Finance
• World Bank

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Incidence of Renegotiation of Infrastructure
Concessions in Latin America and Average Time to
Renegotiation 1988-2001(updated to 2005)
Source Guasch (2004)
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Very Low Incidence of Cancelled Concession
1990-2001
Source Harris (2002)
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Lessons Learned

• Renegotiation is
• part of the process, NOT necessarily a sign of
  failure or a bad deal.
  
• an opportunity to improve the deal and address
  change proactively.
  
• a different kind of challenge, requiring
  transactional and dispute resolution skills
  creative innovation.
  
• an opportunity to provide our clients with
  critical, strategic support.

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The Role of the Bank

• Good offices interested but neutral
• Opening communications
• Encouraging process/focus on issues
• Providing experts/facilitators
• Intervention interested, resourced and neutral
• Provide facilitation
• Create incentives for resolution
• Programmatic assistance

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The Role of the Bank

• Is the Bank the right party to facilitate
• Bolivia not perceived as neutral
• Cape Verde process successful
• Indonesia perceived to have capacity
• Timing of intervention
• Tanzania - process failed
• Columbia early intervention

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Renegotiation

• Lessons learned from Infrastructure
• Jeff Delmon
• Infrastructure, Economics and Finance
• World Bank