Payment of production contracts

The credibility of the contracting authority to make full (gross-cost) or partial (net-cost) payment to operators for the service offer they had provided is crucial to their preparedness to enter into such arrangements. This will include the transparency and integrity of its procedures, and the financial resource standing behind the authority in the event of any problems.

Clearly payments need to be made regularly and on a timely basis so as to enable the operator to pay his staff and suppliers. Typically the sector holds low levels of working capital, and is not in a position to extend creditor payment periods. As such, debtor control is vital.