Problems within the JV on African Infrastructure Projects – when the relationship breaks down

This year’s #ACLConference was the most ambitious attracting a host of international delegates from within and outside the African continent to the city of Lagos, Nigeria. The conference began with a session on “Problems within the JV on African Infrastructure Projects – when the relationship breaks down”. During the session, a panel of experts comprising of Gabriela Palacios-Flusk Head of Legal and Contracts, Development Bank of Southern Africa (DBSA) considered the subject of two ends of the spectrum for Joint Ventures; Lois Oni, Lead Counsel of Technology in Projects and Production Nigeria LNG Limited shared on Joint Ventures in construction projects; Ryan Koopman the General Manager at Grinaker-LTA shared, from a contractor’s perspective, on minimizing the risk of contractors JVs in Africa and Tunde Fagbohunlu SAN, Senior Partner at Aluko & Oyebode examined various case studies on dispute resolution relating to contractors. Some key take aways from the session are:There are countless ways to cook porridge beans depending on how buoyant you are: -JV partners may not have sufficient retention or performance guarantees to provide for defects or incomplete work. JVs can mitigate these risks by ensuring that risks are allocated appropriately. Companies may form joint venture partnerships to share the risk and reward of projects at a lower scale. When choosing a partner, companies may consider the potential partner’s ability to contribute specialized resources. The availability of funding, and efficiency of the supply chain might affect contractors during construction. To mitigate risks, owners can ensure consistent communication and prepare backup plans. Disputes between employers and contractors usually revolve around additional damages, liquidated damages, and project delays. To prevent these disputes, or reduce its effects, owners can conduct due diligence and create escrow accounts.