Turnkey offer

A Turnkey contract is a business arrangement in which a project is delivered in a

completed state. Rather than contracting with an owner to develop a project in
stages, the developer is hired to finish the entire project without owner input. The
builder or developer is separate from the final owner or operator, and the project
is turned over only once it is fully operational. In effect, the developer is finishing
the project and turning the key over to the new owner.
This type of arrangement is commonly used for construction projects ranging
from single buildings to large-scale developments. Under a traditional lump-sum
contract, the owner agrees to pay the developer to complete a project that is
built to the owner's specifications. The owner is given many opportunities to
make decisions throughout the project, and to make changes as needed. In a
turnkey contract, the owner is generally left out of the building process entirely as
the developer handles all decisions and problems related to construction.

Definition of 'Build-Operate-Transfer Contract'

A type of arrangement in which the private sector builds an infrastructure project,
operates it and eventually transfers ownership of the project to the government.
In many instances, the government becomes the firm's only customer and
promises to purchase at least a predetermined amount of the project's output.
This ensures that the firm recoups its initial investment in a reasonable time
span.
(b) Build-operate-and-transfer - A contractual arrangement whereby the project
proponent undertakes the construction, including financing, of a given
infrastructure facility, and the operation maintenance thereof. The project
proponent operates the facility over a fixed term during which it is allowed to
charge facility users appropriate tolls, fees, rentals, and charges not exceeding
those proposed in its bidor as negotiated and incorporated in the contract to
enable the project proponent to recover its investment, and operating and
maintenance expenses in the project. The project
proponent transfers the facility to the government agency or local government
unit concerned at the end of the fixed term which shall not exceed fifty (50)
years:
"The build-operate-and-transfer shall include a supply-and-operate situation
which is a contractual ar
rangement whereby the supplier of equipment and machinery fora given
infrastructure facility, if the interest of the Government so requires, operates the
facility providing in the process technology transfer and training.

(c) Build-and-transfer - A contractual arrangementwhereby the project proponent

undertakes the financing and construction of a given infrastructure or
development facility and after its completion turns it over to the government
agency or local government unit concerned, which shall pay the proponent on an
agreed schedule its total investments expended on the project, plus a reasonable
rate of return thereon. This arrangement may be employed in the construction of
any infrastructure or development project, including critical facilities which, for
security or strategic
reasons, must be operated directly by the Government.
"(d) Build-own-and-operate - A contractual arrangement whereby a project
proponent is authorized to finance, construct, own, operate and maintain an
infrastructure or development facility from which the proponent is allowed to
recover its total investment, operating and maintenance costs plus a reasonable
return thereon by collecting tolls, fees, rentals or other charges from facility
users: Provided, That all such projects, upon recommendation of the Investment
Coordination Committee (ICC) of the National Economic and Development
Authority (NEDA), shall be approved by the
President. Under this project, the proponent which owns the assets of the facility
may assign its operation and maintenance to a facility operator.
(e) Build-lease-and-transfer - A contractual arrangement whereby a project
proponent is authorized to finance and construct an infrastructure or
development facility and upon its completion turns it over to the government
agency or local government unit concerned on a lease arrangement for a fixed
period after which ownership of the facility is automatically transferred to the
government agency or local government unit concerned.
(f) Build-transfer-and-operate - A contractual arrangement whereby the public
sector contracts out the building of an infrastructure facility to a private entity
such that the contractor builds the facility on a turn-keybasis, assuming cost
overrun, delay and specified performance risks.
"Once the facility is commissioned satisfactorily,title is transferred to the
implementing agency/LGU. The private entity, however, operates the facility on
behalf of the implementing agency/LGU under an agreement.
(g) Contract-add-and-operate - A contractual arrangement whereby the project
proponent adds to an existing infrastructure facility which it is renting from the
government. It operates the expanded project over an agreed franchise period.
There may, or may not be, a transfer arrangement in regar
d to the facility.
GATS and WTO in relevance to architecture profession in india
Q.1. When did the General Agreement on Trade in Services
(GATS) come into existence?
The General Agreement on Trade in Services (GATS) came into existence as a
result of
the Uruguay Round of negotiations and entered into force on 1 January 1995, with
the establishment

of the WTO.
The multilateral legal instruments resulting from the Uruguay Round were treated
as a single undertaking. India also signed all the WTO agreements under the
single undertaking rule and
GATS is a part of this whole package.
Q.2. What is the main purpose of GATS?
Prior to the Uruguay Round, services were considered to offer less potential for
trade expansion than goods, thanks to existence of technical, institutional and
regulatory barriers. However, the development of new transmission technologies
facilitating the supply of services (e.g. satellite communication, electronic
banking, tele-education), the opening of monopolies in many countries (e.g. voice
telephony), and gradual liberalization of hitherto regulated sectors like transport,
banking and insurance combined with changes in consumer preferences,
enhanced the tradeability of services. These developments increased
international services flows and created a similar need for
multilateral disciplines as in the area of goods. Thus, the main purpose for the
creation of the
General Agreement on Trade in Services (GATS) was to create a credible and
reliable system of
international trade rules, which ensured fair and equitable treatment of all
countries on the principles of non-discrimination
. It aims at stimulating trade and development by seeking to create a predictable
policy environment wherein the member countries voluntarily undertake to bind
their policy-regimes relating to trade in services.
Let us consider a specific example to distinguish between the four modes of
supply. A particular firm
in country X establishes a subsidiary in country Y. This is supply of services
through Mode
3 i.e. Commercial Presence
. An architect of the said firm sends blueprints over the Internet to another firm in
country Y- this is
Mode 1 i.e. Cross Border Supply. An Engineer from the said firm is deputed to
work in the subsidiary
firm established in country Y for a limited period for managerial operations this
is Mode 4 i.e. Movement of Natural Persons. Certain trainees from the subsidiary
in country Y visit country X .
Practice for foreign architects in india:
The Council of Architecture (CoA), the regulatory body for the profession, has
stepped up its fight against foreign architects practicing in India attracting
severe criticism from several countries, including the US.
Although foreign architects are not allowed to practice in India, several entities
were rendering services in the country, either directly or through tie-ups with
local players. A 1972 law explicitly prohibits any foreign firm architect and the

government, despite its keenness, has refused to open up the sector despite
negotiations at the World trade organisation (WTO).
"only those registered with the council can practice in India". Apart from those
with degrees from recognized Indian architecture schools, the Architect's Act also
recognizes qualifications from certain countries on a "reciprocal basis".
The law clearly bars foreign architects from practicing in India. "It is not part of our commitment to
WTO and can only be done if there is qualification equivalence or mutual recognition," . This means
that architects from a foreign country can be allowed to practice in India on a reciprocal basis if the
professional qualifications are accepted or architects from either country clear the stipulated
professional tests. For this to happen, CoA and its foreign counterpart have to come to an agreement.
REGULATORY STEPS ANDPROCEDURES INVOLVED IN ARCHITECTS
WORKING ABROAD
Regulatory Restraints
The common domestic regulatory constraints may include: a) the acquisition of a
university degree
from an accredited university/school of architecture; b) the accumulation of a
specified period of
recognized and documented post-degree professional internship experience; c)
qualifying for, taking and passing a legally mandated registration examination;
and d) the maintenance of a record of professional practicenot diminished by
ethical or professional issues. In a number of countries there

exists a legal requirement that to be professionally registered one must be a legal

resident of the country. Prohibition on advertising and the adherence to
mandatory fee schedules exist in many countries.A newly developed constraint is
the requirement to participate in an organized system of continuing professional
development in order to maintain membership in a professional body and/or
maintain ones professional license.
Driving Forces
There are five major driving forces that take architects into foreign markets.
First are the clients undertaking design and building projects seeking the services
of foreign architects who have established an internationally renowned
designreputation or who are seeking the services for specialized building types.
The second are business decisions by clients encouraged and facilitated by free
trade agreements who then wish to take their established domestic client
relationships with them into an international arena. Third are public agencies
commissioning domestic architects for projects in foreign countries. Fourth are
architects winning public and private design competitions in foreign countries.
Fifth is the downturn in the domestic economy which results in architects turning
to more successful national economies seeking project commissions in those
countries.
Deciding the Form of Foreign Practice

Any architects working outside their own country are required to make both a
legal and a busin
ess decision with regard to engaging the regulatory regime in the host country. Is
this form of practice likely to a one-time event or potentially the initiation of a
long term project presence?
If it is a one-time event then the most likely course of action will be to identify a
competent local
registered architect, negotiate and sign professional service contract with them,
and have the local architect serve as the legal project architect of record. The
contractual relationship defines their respective 12responsibilities and how the
client fee will be apportioned. This apportionment varies from project to project
depending on the scope of work negotiated between the foreign and domestic
architects. Most commonly the foreign architect carries the project through the
entire design development process. The domestic architect commonly prepares
the working drawings and specifications, assumes responsibility for adhering to
codes of ethics, signing and stamping all of the building documents and assuring
adherenceto all applicable building codes and regulations.
The local architect is also knowledgeable in the countrys
language, construction bidding procedures and construction supervision
methods. Thisapproachavoids the necessity of the foreign architect becoming
registered in the host country. It is a common form of international practice.
If the foreign architect is making a business decision to maintain an ongoing
professional business
presence and practice in a foreign country in order to be the sole architect of
record, then it is necessary to become legally registered in that country under the
prevailing laws and regulations.
There are increasing instances of architectural firms in one country buying a firm
in another country
to expand their international practice.Information Sources for National
Architectural Registration
Within the last decade the availability and accessibility of national information on
architectural
registration laws, regulations, procedures and responsible national bodies have
improve
d significantly.