Economic Regulation of

PPP contract
in the water sector
Case study
Maria Salvetti
 Situation of natural monopoly
Monopoly price dilemma:
- Monopoly price not efficient as set higher than marginal cost which leads to
abstraction of monopoly rent
- Forcing the natural monopoly to sell at efficient price (i.e. marginal cost) leads to
negative profits (Cm<Ca)

Demand (water sold)

Avoid monopoly rent Price
abstraction and Mean cost
Margin
allocative inefficiency
al cost
Quantity (water volume, thousands
m3)

→ Public intervention required to address market failure and help settle pricing
dilemma…
 Why regulate NM?

Other reasons justifying NM regulation

X inefficiency: internal efficiency, cost minimization.

In a competitive environment (pressure from competitors), incentive to reduce costs
to obtain higher profits. In a monopoly situation, lack of incentive.

Technical progress: no incentive to promote technical change and invest in R&D.

Due to its protected position, monopoly would not fear that a rival will promote
products and production methods and would therefore not be driven to innovation.
 Alternatives to Regulation

Competition for the market:

 Create competition between firms for the right of exclusive supply over a
limited period, namely a franchise solution (Demsetz).
 Such competition for the market (i.e., the right to be the natural monopolist)
may be an adequate substitute under some circumstances, where competition is
not possible within the market.
 Monopoly franchises could be auctioned off to the bidder offering the most
attractive terms.

Limits: advantages (experience, knowledge, reputation…) to the incumbent

compared to the outsider bidder
 Economic regulation targets
• Contract regulation: price & performance
– Set a price to avoid monopoly rent
– Set a level of performance/quality required to
avoid inefficiency

• Issues: asymmetry & capture of information

 Scope of regulation
Natural
Economic regulation
monopoly
Tariffs and service quality
Social
Competition regulation
Consumers protection
Politics

Information a
Health regulation
asymmetries
Drinkable water
Sanitation

Externalities Environmental regulation

Resource preservation
Discharge regulation
Price Regulation
Cost-based, price-based,
revenue-based tariffs and
additional methodologies
 Price regulation
Regulating the price: 2 broad types of methodologies

1) “cost-plus-fair rate of return” regulation method (cost based)

Tariff is calculated to cover the regulated firms’ operating costs, plus a
rate of return on the investment.
Prices are adjusted to keep the company’s rate of return on capital at a
constant level.
If the company’s rate of return falls below that level, the regulator allows
prices to rise.

RoR = (Revenues – Opex)/K ≤ x% Revenues – Opex: net profit

price ≤ Opex + (x%*K)/volume K: capex or initial asset base (stock of capital)
x%: limit set by regulator
 Price regulation
Regulating the price: 2 broad types of methodologies

2) “price cap” regulation method (price based)

Prices rise according to “RPI-X” formula: tariff increases by the increase
in the retail price index adjusted by efficiency factor “X” to account for
expected productivity gains & other changes.
Company has incentive to lower costs, since it keeps the resulting
profits, at least for a designated period.
When tariffs are revised, a share of productivity gains can be passed on
to consumers.

Pt = (1+ RPIt – X)*Pt-1

 Price regulation
Additional price regulation methodologies
“Earning sharing” Earnings = Revenues – Opex
Earning sharing = (Revenues – Opex)*rate (%)
Explicit sharing of extra-earnings
between operator & consumers above threshold

“Revenue sharing” Revenue sharing = (Revenues*rate %) – Opex

Scheme more incentive than earning sharing

č : cost fct, average of costs
“Hybrid model” Price = č*(1+RPI-X) + Ř*Capex
of companies in the sector
Ř: rate for RoR
Possibility to remunerate investment according
to their nature (supply or demand side) = use different rate Ř (rate for
demand investment > rate for supply investment, long term risk)
Case Study – Contractual Regulation

SEDIF PPP contract

 Contract Regulation
• Regulation by contract
– Most of the rules are set in advance in the contract between operator &
public authority. Limited discretion to adapt the rules
• Service standards & price revision formula in the contract
• Generic principal: maintain the financial balance of the contract
• Possibilities to negotiate between parties if any meaningful modification
occurs making the contract financially unbalanced

– Advantages
• Well adapted to certain cultural & law traditions
• Allows to minimize the cost of regulation

– Limits
• Contracts are uncomplete
• Institutional set-up for conflict resolution is often underdeveloped
Contract Regulation - France
 Syndicat des Eaux d’Ile-de-France
• Founded in 1923 to produce and deliver drinking water

• SEDIF today :
– Covers 142 cities located on the outskirts of Paris
– Supplies 4 million customers
– Produces 250 millions m3/yr (685 000 m3 distributed/day)

• Main assets :
– 3 water treatment plants
– 48 relay plants
– 8 700 kilometres of pipes
Delivery
territory
Primary
Network
 SEDIF organisation
• Committee with 142 representatives from municipalities
– Gathers 3 times/yr
– Elects a President and 11 Vice-presidents (The Board)

• Make decisions with regard to :

– The price of water: 1.74 € excl. taxes/m³ (2010)
– Budgetary allocations (581 M€)
o Investments scheduled : 200 M€/yr
o Operation and maintenance : 357 M€/yr
– Supervision of operator: 90 employees
– Operation (Veolia Water): 1,100 employees
 PPP contract
• Previous operating contract with Veolia Water
signed in 1962 ending on Dec. 31st 2010.

• Operator in charge of :
– Production and distribution
– Monitoring and maintenance
– Controlling water quality
– Customer service
 PPP contract

Sedif
Investments
Responsible
authority

Contract
Private Operation
company
operator

Invoice
Water service customer
 PPP contract
• New contract signed with Veolia Water for 12 years
(2011-2022) to manage & operate SEDIF water service

• Describe how economic regulation & performance have

been included in the contract
Through two examples: price revision formula
operator remuneration
 Price revision formula
Price revision formula: Rn = R0 x CRTn
R0: price on January 1st 2011
Rn: revised price
CRTn: price revision coefficient defined as follows
Ind.1 Ind.2 Ind.3 Ind.4
CRTn = (1-Pn) x ( a + b Ind.1 + c 0 Ind.2 0 +d Ind.30 +e Ind.4 0 )

a, b, c, d, e: coefficients with (a+b+c+d+e)=1 Pn: productivity

Generic comments:
 Reduced number of indexes compared to previous contract (8 to 4)
 Choose 4 indexes among the proposed ones: ICHTTS1 (wages), EMT
(electricity), TP10A (works in water/sanitation sectors), FSD3 (various costs), PCIB (chemical
products), EM (mechanic equipment)
 Indexes have to be easy to follow, long lasting
 Price revision formula
Ind.1 Ind.2 Ind.3 Ind.4
CRTn = (1-Pn) x ( a + b Ind.10
+c +d Ind.30
+e Ind.4 0
)
Ind.2 0

Elements of economic regulation within the price revision formula

1) Coefficients and indexes should Indexes Coefficient matching Coefficient proposed
SEDIF opex structure by Operator
describe & match the service
ICHTTS 0.4 0.39
opex structure; hence price revision
FSD3 0.3 0.25
& evolution will properly
EMT 0.04 0.06
reflect opex evolution control
TP10A 0.11 0.15
over price evolution

2) 9 price variation “meet up” clauses stated in the contract...

 Price revision formula
9 price variation “meet up” clauses stated in the contract :
• Every three years
• If the average water volumes sold over the past three years varies from
more than 4% (excluding bulk volumes)
• If the scope of the contract varies, as the operator remuneration formula
will have to reflect this change
• If applying CRT induces a variation of more than 4% of the water price
• If there is a substantial change in the infrastructure, in the water treatment
processes or in the service operation conditions
• If there is a substantial change in the service operation conditions due to a
change in legislation
• If there is a substantial change in the service statutory rules
• If one of the four indexes varies from more than 20%
• If the overall remuneration of the operator is caped according to the
present contract conditions for more than 4 years in a row
 Price revision formula
Ind.1 Ind.2 Ind.3
CRTn = (1-Pn) x ( a + b + c + d + e Ind.4 )
Ind.10 Ind.2 0 Ind.30 Ind.4 0

Elements of economic performance within the price revision formula

productivity gains required from operator

1) Pn = 0.75% from the 4th year of the contract onwards

2) Coefficient “a”
Neutrality coefficient used to neutralise a certain proportion of opex:
Former Sedif contract, “a” = 0.1 neutralisation of 10% of opex
New Sedif contract, “a” = 0.15 neutralisation of 15% of opex
 Price revision formula
Ind.1 Ind.2 Ind.3 Ind.4
CRTn = (1-Pn) x ( a + b Ind.1 + c
0 Ind.2 0
+d Ind.30
+e Ind.4 0
)

Year Value for n Value for P

Pn = 0.75% from the 4th year
2011 1 0
of the contract onwards
2012 2 0
2013 3 0
2014 4 0.75%
2015 5 1.50%
2016 6 2.25%
2017 7 3%
2018 8 3.75%
2019 9 4.50%
2020 10 5.25%
2021 11 6%
2022 12 6.75%
 Operator remuneration

• Share on revenues from

Fixed water sold (incl. bulk)

• Service quality
• Opex management
Variable • Share of remaining
operating balance
 Operator remuneration
Operator overall remuneration: fixed part + variable part, caped at 9%

1) Fixed remuneration: 2% of revenues from water volumes sold (incl. bulk)

2) Variable remuneration calculated on basis of operation balance as follows:

“Operation incomes – opex – fixed remuneration”
= Operation balance - fixed remuneration
If balance is negative, operator does not receive any variable remuneration

Elements of variable Share in variable Purpose of variable

remuneration remuneration remuneration

Service quality 40% Performance

Variable Opex management 40% Regulation, performance

remuneration Share on remaining 20% Incentive
operating balance
 Operator remuneration
Cn
Opex management
k=
“k” accounts for & reflects: (1-Pn) * [(CRCF réf * CFn) + (CRCV réf * CVn * (Vn/V0))]
 Productivity gains (Pn)
 Control of variable & fixed costs evolution (CV and CF) compared to
variable & fixed reference costs (CRCV and CRCF) as defined in the contract
The formula takes into account a correction by the volumes (V) for variable costs
Share o/ Share o/
remuneration for remuneration for
k>= k< operator SEDIF
<0.9875 100% 0%
Remuneration is
0.9875 0.99 90% 10%
shared between
0.99 0.9925 78% 22%
SEDIF &
[…] […] […] […]
operator
1.0075 1.0100
depending on 14.3% 85.7%

the value of “k” 1.0100 1.0125 7.1% 92.9%

>1.025 0% 100%
 Operator remuneration

• Share on revenues from

Fixed water sold (incl. bulk)

• Service quality
• Opex management
Variable • Share of remaining
operating balance
 Operator variable remuneration
Elements of variable Share in variable Purpose of variable
remuneration remuneration remuneration

Service quality 40% Performance

Variable Opex management 40% Regulation, performance
remuneration
Share on remaining 20% Incentive
operating balance

Service quality (performance) assessed through a variety of elements:

- Customer service - Service management
- Sustainable development - Water quality
- Regular reporting - Other set of indicators
 Customer service – KPIs (1)
Indicator - definition Period Target Points for Penalty Penalty amount
remuneration threshold
Rate of unforeseen service disruption Yearly <5 15 10 1000€ per disruption
(per 1000 customers/per year) beyond 15
Rate of foreseen service disruption (per Yearly <3 15 5 1000€ per bracket of
1000 customers/per year) 0.1
Connection of a new customer during Monthly Yearly 99% 10 95% 1000€ per bracket of
the first working day following the 0.1%
request
Waterworks during the first 10 working Monthly Yearly 99% 10 95% 1000€ per bracket of
days following the customer request 0.1%
Nb of written claims regarding wrong Monthly Yearly 10 max. 5 20 500€ per justified claim
meter reading
Nb of written claims /1000 customers Monthly Yearly <3 5 5 1000€ per bracket of
0.1 (N/A if collective claim)
% of answers to letters/mails received Monthly Yearly 99.5% 5 98% 1000€ per bracket of
within 8 working days 0.1%
% of answers to written information Monthly Yearly 99.5% 5 98% 1000€ per bracket of
request on water quality within 48h 0.1%
after reception
 Customer service – KPIs (2)

Indicator - definition Period Target Points for Penalty Penalty amount

remuneration threshold
Subscription/termination taken into Monthly Yearly 99.5% 5 98% 1000€ per bracket
account within 24h on working days of 0.1%
% of connection quote requests Monthly Yearly 99.5% 10 98% 1000€ per bracket
answered within 8 working days of 0.1%
% of water intake analysis results after Monthly Yearly 99.5% 5 98% 1000€ per bracket
written claim within 48h of 0.1%
% of emergency intervention within 2h Monthly Yearly 99.5% 10 98% 1000€ per bracket
after customer call of 0.1%
% of appointments within a 2h time slot Monthly Yearly 99.0% 10 95% 1000€ per bracket
of 0.1%
Certification of customer service Yearly Certification 0 Loss of 500,000€ if loss or
centre certification no certification
Average rate of phone pick up (excl. Monthly Yearly 40 sec. 15 60 seconds 1000€/sec.
exceptional circumstances)

Rate of unmissed calls (excl. exceptional Monthly Yearly 90% 15 85% 10,000€/missing %
circumstances)

Rate of recall after message on Monthly Yearly 99% 10 95% 5000€/missing %

answering machine within the day
 Service management – KPIs (1)

Parameter Target Weight Threshold for Penalties

penalty
Pressure (max. and min. values) Non-compliance 0 From the 1st non- 10 000 € pe non-complinace testing
compliance testing
Linear network loss index < 10 m3/km/day 15 > 13 m3/km/day 20 000€ per bracket of 0.1 m3/d/km
Linear index of unrecorded volumes < 12 m3/km/day 15 > 16 m3/km/day 20 000€ per bracket of 0.1 m3/d/km
Non-leakage rate 90% 25 88% 20 000 € per bracket of 0.1%
Linear network repair index 0,3 Nb/km 10 > 0.4 Nb/km 20 000€ per bracket of 0.1 Nb/km
Linear repair index for connections 1.50 10 > 2.00 20 000€ per bracket of 0.1 Nb/km
Non leakage rate on metering 97% 10 96% 20 000 € per bracket of 0.1%
Pipe disinfection <5 5 > 10 10 000€ per disinfection to renew
above 10
Cleaning of reservoirs Annual cleaning of all 0 From the 1st 20 000 € per cleaning not done
reservoirs cleaning done
Renewal of reservoir cleaning No cleaning renewal 5 At least 2 cleaning 5 000 € per cleaning renewed more
per year than twice
Compliance with Sedif information protocol in the No claim 0 From 1st breach 2 000 € per breach
event of a leak
Boreholes No clogging 0 From 1st clogging 50 000 € per clogging
Annual volume produced in the nanofiltration sector 41 000 000 m3 39 000 000 m3 0,20 € per m3 missing
of Méry sur Oise plant
UV installations continuity 3 days maximum 5 > 5 days 5 000 € per day
UV lamps renewal Renewal when power No renewal 10 000 € per delayed renewal
is below 80 % whereas power
below 80 %
 Service management – KPIs (2)

Parameter Target Weight Threshold for penalty Penalties

Utrafiltration membranes renewal Lifespan > 8 years 10 per membrane replaced 20 000 € per membrane per year
before 7 years before 7 years
Active carbon filtres renewal Replacement of a third of per filtre not remplaced 100 000 € per filtre not replaced
the filters / year, for each
treatment process
Production at Neuilly sur Seine > 2.1 millions m3 From 1st m3 missing 0.30€/m3 from 1st m3 missing
Production at Aulnay sous Bois > 2.2 millions m3 From 1st m3 missing 0.30€/m3 from 1st m3 missing
Production at Pantin > 2.6 millions m3 From 1st m3 missing 0.30€/m3 from 1st m3 missing
Orthophosphoric acid treatment 4 days maximum without 5 > 8 days without 5 000 € per day without treatment
treatment treatment beyond 8 days
Dryness rate of sludge 99 % of testing 99 % of testing 2 000 € per bracket of 0.1%
Number of water outages rescued, among < 200 stops 10 > 400 stops 10 000 € per stop beyond 400
water outages linked to leaks, lasting> 4
hours (between 8:00 am and 10:00 pm and
excluding frost) depriving more than 50
users
Number of water outages rescued, among < 20 stops 10 > 40 stops 10 000 € per stop beyond 40
water outages linked to leakage, lasting>
12 hours (between 8:00 am and 10:00 pm
and excluding frost) depriving more than 50
users.
Distribution of bottled water in case of crisis Continuity of service 0 10 € per bottle not distributed
 Service management – KPIs (3)

Threshold for
Parameter Target Weight Penalties
penalty
Rate of soil repair times compliance 95% 5 80% 20 000 € per missing %
Modernizations of isolated connections 1000/year 0 From the 1 st
4 000 € per missing connection
missing connection
Use of SYNCOM system Systematic information From the 1st breach 5 000 € per information not
transmission through communicated through SYNCOM
SYNCOM system
Deadline for transmission of reports on 99% 5 95% 5 000 € per % missing
connection and pipeline work
ISO 9001 0 Not certified 500 000 €
ISO 22000 0 Not certified 500 000 €
OHSAS 18000 0 Not certified 500 000 €
ISO 27000 0 Not certified 500 000 €
Rate of internet customer service 99.9% 0 <99.9% 1000 € per hour of unavailability
availability
Rate of availability of telephone customer 99.9% during working hours 0 <99.9% 1000 € per hour of unavailability
service
Rate of availability of customer central 99 .9% 0 <99.9% 2000 € per hour of unavailability
system (invoice, data bases)
 Sustainable dvpt – KPIs (1)

Threshold for
Parameter Description Target Penalties
penalties
Certified
Certification ISO 14000 Certification by independent institution Not certified 100 000 €
No remark during 2nd remark during 5000 € from the 2nd
Shared audit operator/Sedif ISO 14001
audit audit remark onwards
Renewable energy At leat 23% of renewable energy from Part < 23 % from 5 000 € per 0.1% from
2020 onwards 33% 2020 onwards 2021 onwards
Emission of greenhouse Reduction of 20% at least by 2020 Reduction < 20 % 5 000 € per 0.1% from
33%
gases from 2020 onwards 2021 onwards
Reduction of energy Reduction of 5% at least by 2020 Reduction < 5 % 5 000 € per 0.1% from
10%
consumption from 2020 onwards 2021 onwards
Discharge of suspended 1 000 € per bracket of
100% 100%
matter in water 0.1%
 Sustainable dvpt – KPIs (2)

Threshold for
Parameter Description Target Penalties
penalties
Aluminium discharge in 1 000 € per bracket of
Target value from self-monitoring 100% 100% 100%
water 0.1%

Ozone discharge (mg/m3; 2 500 € per bracket of

% of discharge with concentration < 5ppm 100% 99.95%
controlled average) 0.05%

progression below
Minimum progression of 2% per year from From 7.5% in 2014,
% of light vehicules using 5% in 2014, 10% in
2011 to at least 20% in 2020 of the car to 15% in 2017, and 5000 € par 1%
green energy 2017, and to18% in
float using green energy to 25% in 2021
2021
% of green cars among the
90% 90% 1000 € per 1%
service car float
Acceptance rate of
1000 € per 1%
dumpsters receiving 100% 96%
special industrial waste
Decantation sludge recycle
% of recycled decantation sludge 90% 60% 1000 € per 1%
rate
% of construction sites complying with
Clean construction sites 99% 95% 5000 € par 1%
clean construction site charter
 Water quality production – KPIs (1)

Threshold for penalty - Threshold for penalty -

Parameter Operator's goal Target
surface water plants groundwater plants

Bacteriological analysis compliance rate 0/100ml 100,00% 99,80% 99,00%

Escherichia Coli (E Coli) 0/100ml 100,00% 100,00% 100,00%
Enterococci 0/100ml 100,00% 100,00% 100,00%
Coliform bacteria 0/100ml 100,00% 99,80% 98,00%
Sulphite-reducing bacteria 0/100ml 100,00% 99,80% 98,00%
Bromates 0µg/l 100,00% 98,00% -
Turbidity  0,1 NTU 99,95% 99,95% -
 0,5 NTU 100,00% 100,00% 98,00%
Total aluminum 100µg/l 100,00% 100,00% -
Saturation index -0,2 Is  0,3 100,00% 100,00% 100,00%
Dissolved oxygen 5 mg/l 100,00% 100,00% 100,00%
Iron 200 µg/l 100,00% - 100,00%
Manganese 50 µg/l 100,00% - 100,00%
Ammonium  0,10 mg/l 100,00% 100,00% 100,00%
Total Organic Carbon  2 mg/l 100,00% 100,00% -
Nitrites  0,10 mg/l 100,00% 100,00%
Atrazine 0,1µg/l 100,00% 100,00% 100,00%
Desethylatrazine 0,1µg/l 100,00% 100,00% 100,00%
Desethylatrazine 0,05µg/l 100,00% 98,00% -
Glyphosate ≤ 0,1µg/l 100,00% 100,00% 100,00%
AMPA ≤ 0,1µg/l 100,00% 100,00% 100,00%
More generally any pesticide ≤ 0,1µg/l 100,00% 100,00% 100,00%
Total pesticides 0,5µg/l 100,00% 100,00% 100,00%
 Water quality distribution – KPIs (2)

Parameter Operator's goal Target Threshold for penalty

Bacteriological analysis compliance rate 0/100ml 100,00% 99,90%

Escherichia Coli (E Coli) 0/100ml 100,00% 99,95%
Enterococci 0/100ml 100,00% 99,95%
Coliform bacteria 0/100ml 100,00% 99,80%
Sulphite-reducing bacteria 0/100ml 100,00% 99,80%
Total trihalomethanes 0,75µg/l 100,00% 100,00%
Sum of 4 PAHs 0,01µg/l 100,00% 100,00%
 Regular reporting – list

Reports Date Starting date of penalties Penalities

Monthly indicators 10th of the st
1 day beyond due date 1 000 € per missing or erroneous indicator + 200€
following month per day beyond due date
Yearly indicators April 30 th st
1 day beyond due date 5 000 € per missing or erroneous indicator + 2000€
per day beyond due date
Annual technical April 30th 1st day beyond due date 5 000 € per missing or erroneous indicator + 2000€
reports per day beyond due date
Annual financial April 30 th st
1 day beyond due date 5 000 € per missing or erroneous indicator + 2000€
reports per day beyond due date
Annual legal reports April 30 th st
1 day beyond due date 2000€ per day beyond due date
Annual data system April 30 th st
1 day beyond due date 5 000 € per missing or erroneous indicator + 2000€
reports per day beyond due date

21 Technical reports to produce yearly

20 Financial reports to produce yearly
7 Legal reports to produce yearly
8 Data system reports to produce yearly
 Other requirements - KPIs

Indicator - definition Penalty Penalty amount

threshold
Compliance with requirements for purchase, and Any purchase 20% of the purchase amount
outsourcing order

Communication/transmission of archived data to SEDIF > 1 month 1000€ per day of late
delivery
Preparation of any file regarding an authorisation Non-compliance 1000€ per day of late
demand or administrative declaration which the with existing delivery
operator is responsible for regulations

Accounting reporting on demand 1st day 1000€ per day of late

delivery
Preparation of authorisation agreement for temporary Per agreement 100€ per day of late delivery
occupation
Annual updating of asset inventory Any missing 50€ per missing equipment
equipment
Updating of GIS Any missing 50€ per missing equipment
equipment
 Performance for 2018
• Overall score: 377/450 points (83.8%)
– Customer service (118/150)
– Technical management (123/150)
– Sustainable development (136/150)

Total Remuneration: 16.2M€

Fixed: 5.1M€ Variable: 11.1M€
•Service quality: 3.9M€
•Opex management: 4.8M€
•Remaining operating balance: 2.4M€
 Thank you

maria.salvetti@univ-paris1.fr
 GUIDELINES FOR PERFORMANCE-BASED
CONTRACTS BETWEEN WATER UTILITIES AND
MUNICIPALITIES

CONTRACT PREPARATION STAGE

‒Contract type and duration
‒Review of the existing legal and regulatory framework
‒Review of the utility’s assets and liabilities and restructuring of the utility
‒Preparation of the bidding and selection process
‒Accuracy of initial data and information

PERFORMANCE INDICATORS
‒Definition and selection of performance indicators
‒Definition of baseline scenario
‒Monitoring of indicators – the choice of a technical auditor
 GUIDELINES FOR PERFORMANCE-BASED
CONTRACTS BETWEEN WATER UTILITIES AND
MUNICIPALITIES
TARIFFS AND FINANCIAL OBLIGATIONS OF CONTRACTING AUTHORITY
‒Water pricing rules and principles
‒Types of tariff structures
‒Mechanisms for tariff adjustment
‒Financial obligations of the contracting authority

CONTRACT MONITORING, ENFORCEMENT AND DISPUTE RESOLUTION

‒Monitoring of contract implementation
‒Types of conflict resolution mechanisms.
‒Dispute settlement in the reviewed cases
‒Contract enforcement mechanisms

RISK MANAGEMENT
‒Types of risks
‒Risk allocation