Major infrastructure and energy projects in Bangladesh commonly rely on EPC (Engineering, Procurement and Construction) contracts and follow-on O&M (Operation & Maintenance) agreements. For international employers, contractors and financiers, attention to allocation of risk, performance security, local compliance and enforceability is essential. This briefing is prepared from the perspective of a global law firm with a London office at Holborn Gate, 330 High Holborn, London, WC1V 7QH, England, and focuses on practical, cross‑border considerations rather than country‑specific legal advice.

Key contractual elements

EPC contracts should establish single‑point responsibility for design, procurement and construction, with clear milestones, acceptance tests and handover criteria. Core provisions to negotiate include:

• Scope and specifications, including design standards and reference documents;
• Time for completion and liquidated damages or other delay mechanisms;
• Performance guarantees, defects liability periods and performance tests;
• Price structure and variations, currency and indexing arrangements;
• Force majeure, extraordinary events and suspension/termination rights.

Risk allocation, security and warranties

Well drafted EPC and O&M contracts allocate risk to the party best able to manage it, but market realities and local procurement rules often influence bargaining power. Typical commercially negotiated protections include:

• Parent company or bank guarantees, performance bonds and retentions;
• Insurance requirements custom‑tailored to construction and operational risks;
• Carefully drafted warranties (design, materials, workmanship) with defined limitation periods;
• Clear interfaces between EPC and O&M phases to avoid disputes at handover.

Cross‑border and compliance considerations

Projects involving foreign contractors should prepare for regulatory, customs and local content requirements. Typical issues to address contractually and in project governance include:

• Permits, approvals and the responsible party for obtaining them;
• Importation, duty and VAT treatment of equipment and tax residence implications for payments;
• Use of local sub‑contractors, labour regulations and health & safety obligations;
• Anti‑corruption, sanctions compliance and export control obligations for equipment and technology.

Dispute resolution and governing law

Parties commonly opt for England & Wales law and arbitration or the English courts for disputes due to predictability and enforceability. When determining dispute resolution mechanisms consider:

• Whether to select institutional arbitration (e.g. ICC, LCIA) or ad hoc procedures;
• Interim relief requirements and availability of emergency arbitrator or local injunctive relief;
• How judgments and awards will be enforced locally against assets;
• Interplay between contractual dispute boards, step‑in rights for lenders and insolvency regimes.

Practical checklist

1. Confirm project scope, technical standards and acceptance test protocols in the contract.
2. Agree security package (bonds, guarantees, retentions) and limit liability caps clearly.
3. Allocate responsibility for permits, customs clearance and local taxes.
4. Specify dispute resolution, interim relief measures and the governing law.
5. Build in operational transition arrangements and KPIs for O&M contracts.
6. Include compliance covenants (anti‑corruption, sanctions) and audit rights.

Jurisdiction and sources

For project participants seeking primary materials and official guidance, consult the relevant government and regulatory websites:

• UK Government (gov.uk) — courts, enforcement and public procurement guidance for cross‑border projects.
• Government of the People’s Republic of Bangladesh (gov.bd) — official policy and notice portals.
• Bangladesh Investment Development Authority (BIDA) — investment approvals and incentives.
• Bangladesh Energy Regulatory Commission (BERC) — sector‑specific regulatory framework.

International parties should obtain local legal and tax advice before finalising contracts and project documentation.

General information only; not legal advice and not a substitute for advice on a particular matter.