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Construction Operating Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Construction Operating Agreement

"I need a Construction Operating Agreement for a solar power plant in Saudi Arabia, with operations commencing in March 2025, that includes specific provisions for local content requirements and technology transfer obligations."

Document background
The Construction Operating Agreement is a specialized contract used in Saudi Arabia when a single entity is responsible for both overseeing construction and managing subsequent operations of a facility or infrastructure project. This document is particularly crucial for complex projects where seamless transition from construction to operation is essential. It incorporates Saudi Arabian legal requirements, including compliance with Sharia law principles, local content requirements, and Saudization policies. The agreement typically includes detailed technical specifications, performance standards, operational procedures, and maintenance requirements. It's commonly used in large-scale industrial, commercial, or infrastructure projects where long-term operational efficiency is as important as the initial construction quality.
Suggested Sections

1. Parties: Identification of the contracting parties, including the owner/employer and the operator

2. Background: Context of the agreement, project overview, and purpose

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and interpretation rules

4. Scope of Services: Detailed description of construction and operation services to be provided

5. Term and Commencement: Duration of the agreement, conditions for commencement, and extension options

6. Operator's Obligations: Key responsibilities and duties of the operator during construction and operation phases

7. Owner's Obligations: Responsibilities and obligations of the owner/employer

8. Performance Standards: Required standards of performance, KPIs, and quality requirements

9. Personnel and Labor: Requirements for staffing, qualifications, and compliance with Saudi labor laws

10. Health, Safety and Environment: HSE requirements and compliance with Saudi regulations

11. Payment Terms: Compensation, payment mechanisms, and financial arrangements

12. Reporting and Compliance: Required reports, inspections, and compliance with regulations

13. Insurance and Liability: Insurance requirements and allocation of liabilities

14. Force Majeure: Force majeure events and consequences

15. Termination: Termination rights, procedures, and consequences

16. Dispute Resolution: Procedures for resolving disputes under Saudi law

17. Governing Law: Confirmation of Saudi law as governing law and related provisions

Optional Sections

1. Islamic Finance Compliance: Required if project involves Islamic financing structures

2. Local Content Requirements: Required if project falls under Saudi Aramco or other specific local content requirements

3. Technology License: Required if specific technology or intellectual property is being licensed

4. Performance Security: Required if additional security or guarantees are needed

5. Step-in Rights: Required if lender or owner step-in rights are contemplated

6. Training and Knowledge Transfer: Required if Saudization or knowledge transfer requirements apply

7. Utilities and Infrastructure: Required if separate arrangements for utilities and infrastructure are needed

Suggested Schedules

1. Schedule 1 - Site Description: Detailed description and plans of the construction and operation site

2. Schedule 2 - Scope of Works: Detailed technical specifications and scope of construction works

3. Schedule 3 - Operating Procedures: Detailed operating procedures and standards

4. Schedule 4 - Performance Standards: Detailed KPIs and performance requirements

5. Schedule 5 - Payment Mechanism: Detailed payment calculations and procedures

6. Schedule 6 - Required Insurances: List and details of required insurance coverage

7. Schedule 7 - Forms of Certificates: Templates for various certificates and notices

8. Schedule 8 - HSE Requirements: Detailed health, safety, and environmental requirements

9. Schedule 9 - Permits and Approvals: List of required permits and responsibilities for obtaining them

10. Appendix A - Personnel Requirements: Staffing requirements and qualifications

11. Appendix B - Testing and Commissioning: Procedures for testing and commissioning

12. Appendix C - Maintenance Requirements: Detailed maintenance procedures and schedules

Authors

Alex Denne

Head of Growth (Open Source Law) @ 黑料视频 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions


































































Clauses








































Relevant Industries

Infrastructure

Commercial Real Estate

Industrial Manufacturing

Oil & Gas

Power Generation

Healthcare Facilities

Educational Facilities

Retail Developments

Hospitality

Transportation

Relevant Teams

Legal

Operations

Construction

Engineering

Commercial

Finance

Risk Management

Health Safety Environment

Procurement

Project Management

Compliance

Technical Services

Facility Management

Relevant Roles

Project Director

Construction Manager

Operations Manager

Facility Manager

Technical Director

Contract Manager

Legal Counsel

Risk Manager

Commercial Manager

HSE Manager

Engineering Manager

Procurement Manager

Finance Director

Compliance Officer

Technical Supervisor

Industries










Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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