Model Concession Agreement For Railway Annuity Projects

257 Pages·2016·1.48 MB·English

For official use only

DRAFT COPY

Model Concession Agreement

For
Railway Annuity Projects

Ministry of Railways
Government of India
For official use only

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For official use only
Contents

PART I
Preliminary

Recitals (Concession Agreement) 14

1 Definitions and Interpretation 16
1.1 Definitions 16
1.2 Interpretation 16
1.3 Measurements and arithmetic conventions 19
1.4 Priority of agreements and errors/discrepancies 19
{1.5 Joint and several liability} 20

PART II
The Concession 21

2 Scope of the Project 23
2.1 Scope of the Project 23

3 Grant of Concession 24
3.1 The Concession 24

4 Obligations of the Concessionaire 25
4.1 Obligations of the Concessionaire 25
4.2 Obligations relating to Project Agreements 27
4.3 Obligations relating to Sub-contracts and any other agreements 28
4.4 Employment of foreign nationals 28
4.5 Concessionaire‟s personnel 29
4.6 Advertisement on Railway Project 29
4.7 Concessionaire‟s care of the Works 29
4.8 Electricity, water and other services 29
4.9 Unforeseeable difficulties 29
4.10 Training of Authority‟s personnel 30
4.11 Safety at work Site 30
4.12 Damages for delay by the Concessionaire 30
4.13 Obligations of the concessionaire relating to Change in Ownership 31

5 Obligations of the Authority 33
5.1 Obligations of the Authority 33
5.2 Maintenanceand operation of the existing facilities 34
5.3 Environmental and Forest Clearances 35
5.4 Machinery and equipment 35
[5.5 Electricity transmission lines] 36
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5.6 Disconnection for modification of existing signalling and
telecommunication Works 36
[5.7 Provision of Power Blocks and Traffic Blocks] 36

6 Representations and Warranties 38
6.1 Representations and warranties of the Concessionaire 38
6.2 Representations and warranties of the Authority 39
6.3 Disclosure 40

7 Disclaimer 41
7.1 Disclaimer 41

PART III
Construction 43

8 Performance Security 45
8.1 Performance Security 45
8.2 Appropriation of Performance Security 45
8.3 Release of Performance Security 46
8.4 Deemed Performance Security 46
8.5 Appropriation of Deemed Performance Security 46
8.6 References to performance security 47

9 Right of Way 48
9.1 The Site 48
9.2 Procurement of the Site 48
9.3 Damages for delay in handing over the Site 49
9.4 Site to be free from Encumbrances 50
9.5 Protection of Site from encroachments 50
9.6 Special/temporary Right of Way 51
9.7 Access to the Authority and the Authority‟s Engineer 51
9.8 Geological and archaeological finds 51

10 Utilities and Trees 52
10.1 Existing utilities and roads 52
10.2 Shifting of obstructing utilities 52
10.3 New utilities 52
10.4 Felling of trees 53

11 Design and Construction of the Railway Project 54
11.1 Obligations prior to commencement of Works 54
11.2 Design and Drawings 55
11.3 Construction of the Railway Project 59
11.4 Extension of time for completion 60
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11.5 Incomplete Works 61
11.6 Equipment specific Maintenance Manual 62

12 Quality Assurance, Monitoring and Supervision 63
12.1 Quality of Materials and workmanship 63
12.2 Quality control system 63
12.3 Methodology 64
12.4 Inspection and technical audit by the Authority 64
12.5 External technical audit 64
12.6 Inspection of construction records 64
12.7 Monthly progress reports 64
12.8 Inspection 64
12.9 Samples 65
12.10 Tests 65
12.11 Examination of work before covering up 66
12.12 Rejection 66
12.13 Remedial work 67
12.14 Delays during Construction 67
12.15 Quality control records and Documents 67
12.16 Video recording 68
12.17 Suspension of unsafe Construction Works 68

13 Completion Certificate 69
13.1 Tests on completion 69
13.2 Provisional Certificate 69
13.3 Completion of Punch List items 70
13.4 Completion Certificate 71
13.5 Rescheduling of Tests 71
13.6 Commercial Operation Date 71

14 Change of Scope 73
14.1 Change of Scope 73
14.2 Procedure for Change of Scope 73
14.3 Payment for Change of Scope 74
14.4 Restrictions on Change of Scope 74
14.5 Power of the Authority to undertake Works 75

15 Traffic Regulation 76
15.1 Traffic regulation by the Concessionaire 76

16 Defects Liability 77
16.1 Defects Liability Period 77
16.2 Remedy and rectification of Defects and deficiencies 77
16.3 Cost of remedying Defects 77
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16.4 Concessionaire‟s failure to rectify Defects 78
16.5 Concessionaire to search cause 78
16.6 Extension of Defects Liability Period 78

17 Authority’s Engineer 79
17.1 Appointment of the Authority‟s Engineer 79
17.2 Duties and functions of the Authority‟s Engineer 79
17.3 Authorised signatories 80
17.4 Instructions of the Authority‟s Engineer 80
17.5 Determination by the Authority‟s Engineer 80
17.6 Remuneration of the Authority‟s Engineer 81
17.7 Replacement of the Authority‟s Engineer 81
17.8 Interim arrangement 81

PART IV
Financial Covenants 82

18 Financial Close 84
18.1 Financial Close 84
19 Payments 86
19.1 Contract Price 86
19.2 Bonus on early completion 86
19.3 Annuity Payments during payback period 86
19.4 Change in Law 87
19.5 Payment of Change of Scope Order 87
19.6 Treatment of incomplete Works 88

20 Escrow Account 89
20.1 Escrow Account 89
20.2 Deposit in Escrow Account 89
20.3 Withdrawals during Concession period 89
20.4 Withdrawals upon Termination 90

21 Insurance 92
21.1 Insurance for Works 92
21.2 Notice to the Authority 93
21.3 Evidence of Insurance Cover 93
21.4 Remedy for failure to insure 93
21.5 Waiver of subrogation 94
21.6 Concessionaire‟s waiver 94
21.7 Cross liabilities 94
21.8 Accident or injury to workmen 94
21.9 Insurance against accident to workmen 94
21.10 Application of insurance proceeds 95
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21.11 Compliance with policy conditions 95

Part V
Force Majeure and Termination 96

22 Force Majeure 97
22.1 Force Majeure 97
22.2 Non-Political Event 97
22.3 Indirect Political Event 98
22.4 Political Event 98
22.5 Duty to report Force Majeure Event 99
22.6 Effect of Force Majeure Event on the Agreement 99
22.7 Termination Notice for Force Majeure Event 100
22.8 Termination Payment for Force Majeure Event 101
22.9 Dispute resolution 101
22.10 Excuse from performance of obligations 101

23 Suspension of Concessionaire’s Rights 103
23.1 Suspension upon Concessionaire Default 103
23.2 Authority to act on behalf of Concessionaire 103
23.3 Revocation of Suspension 103
23.4 Substitution of Concessionaire 104
23.5 Termination 104

24 Termination 105
24.1 Termination for Concessionaire Default 105
24.2 Termination for Authority Default 108
24.3 Termination Payment 108
24.4 Certain limitations on Termination Payment 109
24.5 Other rights and obligations of the Authority 110
24.6 Survival of rights 110

25 Divestment of Rights and Interest 112
25.1 Divestment Requirements 112
25.2 Inspection & cure 113
25.3 Co-operation & assistance on transfer of Project 113
25.4 Vesting Certificate 113
25.5 Divestment costs etc. 114

PART VI
Other Provisions 115

26 Assignment and Charges 116
26.1 Restrictions on assignment and charges 116
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26.2 Permitted assignment and charges 116
26.3 Substitution Agreement 116
26.4 Assignment by the Authority 117

27 Liability and Indemnity 118
27.1 General indemnity 118
27.2 Indemnity by the Concessionaire 118
27.3 Notice and contest of claims 119
27.4 Defence of claims 119
27.5 No consequential claims 120
27.6 Survival on Termination 120

28 Dispute Resolution 121
28.1 Dispute Resolution 121
28.2 Conciliation 121
28.3 Arbitration 121
28.4 Adjudication by a tribunal 122

29 Rights and Title over the Site 123
29.1 Licensee rights 123
29.2 Access rights of the Authority and others 123
29.3 Property Taxes 123
29.4 Restriction on sub-letting 123

30 Miscellaneous 124
30.1 Governing law and jurisdiction 124
30.2 Waiver of immunity 124
30.3 Depreciation and interest 124
30.4 Delayed payments 125
30.5 Waiver 125
30.6 Liability for review of Documents and Drawings 125
30.7 Exclusion of implied warranties etc. 125
30.8 Survival 126
30.9 Entire Agreement 126
30.10 Severability 126
30.11 No partnership 127
30.12 Third parties 127
30.13 Successors and assigns 127
30.14 Notices 127
30.15 Language 128
30.16 Counterparts 128
30.17 Confidentiality 128
30.18 Copyright and Intellectual Property rights 128
30.19 Limitation of Liability 129
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31 Definitions 130
31.1 Definitions 130

Schedules 142

A Site of the Project 143

1 The Site 143
Annex-I: Site 144
Annex-II: Dates for providing Right of Way 150
Annex-III: Alignment Plans 153
Annex-IV: Environmental Clearances and Forest Clearances 154

B Development of the Railway Project 155
1 Development of the Railway Project 155
2 Specifications and Standards 155
Annex-I: Description of the Railway Project 156

C Project Facilities 195
1 Project Facilities 195
2 Description of Project Facilities 195

D Specifications and Standards 196
1 Construction 196
2 Design Standards 196
3 Latest Version 196
4 Terms used in Manuals 196
5 Absence of specific provisions 196
6 Alternative Specifications and Standards 197
Annex-I: Specifications and Standards for Construction 198
Annex-II: Time Schedule for review of Drawings by the Authority 200

E Applicable Permits 204
1 Applicable Permits 204

F Form of Bank Guarantee 205
Annex-I: Form of Guarantee for Performance Security 205

G Drawings 210
1 Drawings 210
2 Additional Drawings 210
Annex-I: List of Drawings 211

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H Project Completion Schedule 214
1 Project Completion Schedule 214
2 Project Milestone-I 214
3 Project Milestone-II 214
4 Project Milestone-III 214
5 Scheduled Completion Date 214
6 Extension of time 215

I Tests on Completion 216
1 Schedule for Tests 216
2 Tests 216
3 Agency for conducting Tests 217
4. Completion Certificate 217
J Provisional Certificate 218
Completion Certificate 219
K Selection of Authority’s Engineer 220
1 Selection of Authority‟s Engineer 220
2 Terms of Reference 220
Annex-I: Duties and Responsibilities for Authority‟s Engineer 221

L Insurance 222
1 Insurance during Construction Period 222
2 Insurance for Concessionaire‟s Defects Liability 222
3 Insurance against injury to persons and damage to property 222
4 Insurance to be in joint names 223
M Provision of Traffic Blocks and Power Blocks 224
N Machinery and Equipment 225
O Escrow Agreement 226

P Substitution Agreement 241

Q Sample Calculation sheet for Annuity Payment

R Vesting Certificate

Appendices 254

Appendix-I – List of Bid-Specific Clauses 255
Appendix-II – List of Project-Specific Clauses 256
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