Editor's note: Once a data centre project enters the construction and contract-negotiation stage, land, power, water and network conditions all need to be implemented through specific documents and contracts. Whether the project can be constructed and launched on schedule depends not only on whether these resources are available, but also on whether the contracts clearly address capacity, timing, responsibility and the treatment of changed conditions.
Data centre projects usually involve land or industrial-park agreements, power-supply agreements, water and cooling documents, network-services contracts, and EPC, equipment-procurement and operating agreements. This article focuses mainly on land, power, water and network contracts, examining the matters these contracts usually address and the issues worth considering in advance when signing them.
Planning and final review: Lawyer Zhang Jingxinyue, lawyer qualified in China and registered as a foreign lawyer in Singapore Research and preparation: Zhongxin Legal News Team
01 Land Contracts and Expansion Space
Once a site has been selected for a data centre project, the land rights must be clarified first. The project may involve a land purchase or may obtain the right of use through a long-term lease or an industrial-park agreement.
Land contracts generally address title, permitted planning use, lease term, renewal, construction conditions, and environmental and fire-safety requirements. If the project is planned in phases, later expansion must also be considered in advance. For example, if the land for phase one is confirmed but phase two requires the acquisition of an adjacent parcel, the timing of that acquisition and whether the project has priority will affect later capacity planning and investment arrangements.
An industrial-park agreement must also be reviewed to establish exactly what the park is responsible for. “Assistance with coordinating” power and water matters has a different legal effect from a commitment to provide specified resource conditions by a particular date. If the park is only helping to communicate and the resources are ultimately not obtained, the park may not necessarily be in breach. If the contract contains a clear commitment, the parties need to agree the timing, conditions and treatment if the commitment is not achieved.
Land contracts may also affect financing. The project company's rights over the land or lease, whether those rights may be secured, whether lender intervention requires consent from the landowner or park, and whether a change in equity affects the use of the land are all matters commonly re-examined at the financing stage.
02 Power Contracts: Capacity, Connection and Expansion
Power is one of the most important basic conditions for a data centre project. A power-supply agreement usually needs to do more than state that power will be provided; it should specify capacity, connection timing, the method of expansion and responsibility for the connection.
When Singapore allocated new capacity to selected projects in the second round of DC-CFA2, it also disclosed commitments concerning green energy, liquid cooling, IT-equipment efficiency and Green Mark. Capacity allocation, a power-supply agreement, connection approval and actual energisation are nevertheless separate stages.
In its 2026 announcement concerning data centre investment, MIDA also identified power and water conditions as matters of focus in project screening. Once a project moves into implementation, the company still needs to return to the supply documents and specific contracts to determine how much capacity the project can actually obtain and when it can be used.
In addition to normal supply, power contracts may address backup power, UPS systems, generators, fuel, maintenance windows and outage notices. These terms will not be identical across projects because project scale and customer requirements differ.
The contracts between the project company and its customers also require attention. If the project company promises customers a high level of service availability while the upstream power contract imposes strict limits on outage liability, the project company may first face customer claims and only then have to address the allocation of responsibility with the upstream supplier.
03 Water and Cooling
The water requirements of different data centre projects vary substantially, depending on the facility's scale, cooling method, local climate and water-resource conditions.
At the early stage of a project, the team will usually need to understand the water source, volume, connection facilities, discharge conditions, recycling and the alternative arrangements available if the water source is interrupted. If liquid cooling, circulating water or another water-saving technology is used, the relevant technical solution will also feed into the EPC contract, water arrangements and later operations.
The MITI Guidelines for Sustainable Development of Data Centre in Malaysia address PUE, WUE, renewable energy and water conservation. In different projects, WUE may be a design metric or may be linked to investment incentives, park requirements, customer contracts or operating reports. Its significance therefore needs to be assessed against the specific project documents.
There is a public Singapore case that is useful for comparison. In 2019, the Singapore High Court heard Global Switch (Property) Singapore Pte Ltd v Arup Singapore Pte Ltd. The case concerned mechanical and electrical design, power supply and cooling-capacity issues in a data centre expansion project. The court ultimately had to assess responsibility by reference to the consultant's scope of work, the design requirements and the specific contractual terms.
The case shows that although cooling and power supply are initially technical matters, once they enter project implementation they become connected with design documents, consultants' responsibilities and contractual arrangements.
Accordingly, if the cooling solution has been written into the technical specifications or project requirements, the EPC contract will generally also need to address performance standards, testing, acceptance and rectification. A water or industrial-park agreement should address who is responsible if water is insufficient, facilities fail or policy changes occur.
04 Network Contracts: Connectivity, Redundancy and Service Standards
Network contracts first address bandwidth, the connection method and price, but for a data centre, stability and redundancy are equally important.
For colocation, cloud services or data centres serving large enterprise customers, the project will usually also need to consider multiple carriers, multiple routes, disaster recovery and alternatives if submarine cables or backbone routes fail.
Singapore's Digital Connectivity Blueprint and IMDA's relevant guidelines on cloud services and data centres both address digital-infrastructure resilience, cybersecurity and business continuity. The legal nature and scope of application of these materials are not identical, but they provide useful reference points for network design, operating systems and customer SLAs.
Network-services contracts may also address maintenance notices, fault response, recovery time, third-party lines, subcontractors and limitations of liability.
If the project company has promised customers a particular network availability or multi-route redundancy, it must also check whether the upstream network provider's contract can support those promises. Otherwise, the customer contract and upstream network contract may contain inconsistent scopes of responsibility.
05 Coordination Among the Different Contracts
Land, power, water and networks are often provided by different entities and arranged through different contracts, but they ultimately serve the same project schedule.
For example: when will the land be delivered, when will power be connected, and when will the EPC contractor start work? When will customers go live, and will networks, cooling and backup systems be in place before launch? These timetables should preferably correspond to one another.
Financing adds another layer of requirements. A lender may require the project company to obtain land, power or other key documents before a drawdown. Which documents must be put in place in advance and which may continue to be processed during construction will depend on the specific financing conditions.
The contracts do not need to push every risk to the park or supplier. More important is to state clearly what the parties have agreed: who is responsible for what, when it must be completed, and whether the project may be delayed, adjusted or terminated, or whether a party must bear the resulting costs if it is not completed on time.
The main purpose of reviewing these contracts together is to avoid a situation in which one contract promises something that another contract does not support.
Conclusion
Data centre projects involve many contracts, with land, power, water and networks being only some of the more basic categories.
When signing these contracts, the parties can first clarify several questions: what resources the project can actually obtain, when they can be obtained, who is responsible, and how the parties will respond if the conditions change.
Land conditions affect construction and expansion. The power-connection date affects EPC and financing. Water and cooling affect design and acceptance. Network conditions affect customer services. The more clearly these matters are addressed in the early contracts, the easier it will be for construction, financing and operations to proceed in accordance with the original project plan.
Key References
- EDB/IMDA: Four data centre proposals selected as part of second DC-CFA
- MIDA: Malaysia Secures RM218.5 Billion in Approved Investments In 1H 2026
- MITI: Guidelines for Sustainable Development of Data Centre
- Malaysia Energy Commission: Energy Efficiency and Conservation Act 2024
- IMDA: Singapore's Digital Connectivity Blueprint
- IMDA: Advisory Guidelines for Cloud Services and Data Centres
- Singapore High Court: Global Switch (Property) Singapore Pte Ltd v Arup Singapore Pte Ltd [2019] SGHC 122
Disclaimer: This article does not constitute legal advice, investment advice or a commitment to provide professional services in relation to any specific project or transaction. Data centre projects involve multiple areas, including investment access, land, power, water, communications, data protection, energy efficiency, engineering and construction, operations and financing. Specific matters should be separately assessed by the relevant professional advisers or lawyers in light of the project location, business model, transaction documents and the latest official rules.
This article is general information and not legal advice. Specific matters require assessment by appropriately qualified professionals.