MODEL CONCESSION AGREEMENT - Kar

204 Pages·2008·0.72 MB·English

MODEL CONCESSION AGREEMENT

FOR

PRIVATE SECTOR PROJECTS

IN

MAJOR PORTS

Department of Shipping
(Ports Wing)
Ministry of Shipping, Road Transport & Highways
Government of India

1
CONCESSION AGREEMENT

BETWEEN

BOARD OF TRUSTEES FOR ………...…….. PORT
(THE CONCESSIONING AUTHORITY)

AND

……………………………………………….. LTD.
(THE CONCESSIONAIRE)

FOR
................................................................................

................................................................................

(PROJECT TITLE)

DATED ..........................................

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CONCESSION AGREEMENT

TABLE OF CONTENTS

ARTICLE 1.....................................................................................................................................................10
DEFINITIONS AND INTERPRETATION................................................................................................10
1.1 DEFINITIONS...................................................................................................................................10
1.2 OTHER REFERENCES......................................................................................................................24
1.3 INTERPRETATIONS..........................................................................................................................25
1.4 MEASUREMENTS AND ARITHMETIC CONVENTIONS......................................................................27
1.5 AMBIGUITIES AND DISCREPANCIES...............................................................................................27
ARTICLE 2.....................................................................................................................................................29
CONCESSION AND PORT ASSETS..........................................................................................................29
2.1 CONCESSION..................................................................................................................................29
2.2 CONCESSION PERIOD.....................................................................................................................29
2.3 ACCEPTANCE OF THE CONCESSION................................................................................................30
2.4 PORT’S ASSETS..............................................................................................................................30
2.5 USE OF PORT’S ASSETS..................................................................................................................30
2.6 INFORMATION ABOUT PROJECT SITE AND PORT’S ASSETS...........................................................31
2.7 ACCEPTANCE OF THE PORT ASSETS...............................................................................................31
2.8 PEACEFUL OCCUPATION................................................................................................................32
ARTICLE 3.....................................................................................................................................................33
CONDITIONS PRECEDENT.......................................................................................................................33
3.1 CONDITIONS PRECEDENT:..............................................................................................................33
ARTICLE 4.....................................................................................................................................................38
PERFORMANCE GUARANTEE................................................................................................................38
4.1 PERFORMANCE GUARANTEE..........................................................................................................38
ARTICLE 5.....................................................................................................................................................39
INDEPENDENT ENGINEER.......................................................................................................................39
5.1 INDEPENDENT ENGINEER...............................................................................................................39
ARTICLE 6.....................................................................................................................................................41
PROJECT IMPLEMENTATION................................................................................................................41
6.1 PREPARATION OF DESIGNS AND DRAWINGS..................................................................................41
6.2 REVIEW OF THE DESIGNS AND DRAWINGS....................................................................................41
6.3 CONSTRUCTION PHASE..................................................................................................................43
6.4 OBLIGATIONS OF THE CONCESSIONAIRE........................................................................................43
6.5 OBLIGATIONS OF THE CONCESSIONING AUTHORITY.....................................................................45
6.6 SUSPENSION OF WORKS.................................................................................................................46
6.7 ISSUE OF COMPLETION CERTIFICATE.............................................................................................47
6.8 CHANGE OF SCOPE.........................................................................................................................48
6. 9 LIQUIDATED DAMAGES..................................................................................................................51
ARTICLE 7.....................................................................................................................................................53
OPERATIONS & MAINTENANCE...........................................................................................................53
7.1 (a) Obligations of the Concessionaire...........................................................................................53
(b) Rights of Concessionaire.........................................................................................................60
(c) Obligations of the Concessioning Authority...........................................................................61
7.2 UTILITIES AND SERVICES...............................................................................................................62
7.3 LIABILITY FOR SHORTFALL IN PERFORMANCE...............................................................................63
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ARTICLE 8.....................................................................................................................................................65
TARIFF............................................................................................................................................................65
8.1 LEVY AND RECOVERY OF THE TARIFF...........................................................................................65
8.2 COLLECTION OF CESSES AND CHARGES........................................................................................65
ARTICLE 9.....................................................................................................................................................66
PAYMENTS TO THE CONCESSIONING AUTHORITY......................................................................66
9.1 LICENSE FEE...................................................................................................................................66
9.2 PAYMENTS OF ROYALTY................................................................................................................66
9.3 UTILITIES OR SERVICES..................................................................................................................67
9.4 CERTIFIED ACCOUNTS...................................................................................................................67
9.5 ESCROW ACCOUNT........................................................................................................................69
ARTICLE 10...................................................................................................................................................72
ASSETS: OWNERSHIP AND PERMITTED CHARGE..........................................................................72
10.1 OWNERSHIP OF ASSETS..................................................................................................................72
(a) Land and Water Area...............................................................................................................72
(b) Assets created or provided by the Concessionaire..................................................................72
10.2 PERMITTED CHARGE ON ASSETS...................................................................................................73
ARTICLE 11...................................................................................................................................................74
SHAREHOLDING.........................................................................................................................................74
11.1 OWNERSHIP STRUCTURE................................................................................................................74
11.2 SHAREHOLDING.............................................................................................................................74
11.3 CONSTITUENT DOCUMENTS...........................................................................................................75
ARTICLE 12...................................................................................................................................................76
GENERAL RIGHTS, DUTIES AND OBLIGATIONS.............................................................................76
12.1 OF THE CONCESSIONAIRE..............................................................................................................76
(a) Applicable Permits...................................................................................................................76
(b) Taxes & duties..........................................................................................................................76
(c) Insurance...................................................................................................................................76
(d) Indemnification.........................................................................................................................79
(e) Assignability.............................................................................................................................80
(f) Engagement of Contractors......................................................................................................80
(g) Condition Survey......................................................................................................................82
12.2 OF THE CONCESSIONING AUTHORITY............................................................................................83
(a) Assistance in obtaining Approvals, Permits and Licenses......................................................83
(b) Taxes and Duties......................................................................................................................83
(c) Competing Facilities.................................................................................................................83
(d) General rights of inspection and verification..........................................................................84
12.3 OF THE CONCESSIONING AUTHORITY AND THE CONCESSIONAIRE...............................................84
(a) Compliance with Laws and Regulations..................................................................................84
(b) Rights to Documents................................................................................................................84
ARTICLE 13...................................................................................................................................................86
CHANGE IN LAW.........................................................................................................................................86
13.1 CHANGE IN LAW............................................................................................................................86
13.2 THE CONCESSIONAIRE’S REMEDY.................................................................................................87
ARTICLE 14...................................................................................................................................................90
FORCE MAJEURE........................................................................................................................................90
14.1 FORCE MAJEURE EVENT................................................................................................................90
14.2 NON-POLITICAL EVENTS...............................................................................................................90
14.3 POLITICAL EVENTS........................................................................................................................91
14.4 OTHER EVENTS..............................................................................................................................92
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14.5 NOTICE OF FORCE MAJEURE EVENT..............................................................................................93
14.6 PERIOD OF FORCE MAJEURE..........................................................................................................94
14.7 RESUMPTION OF PERFORMANCE....................................................................................................94
14.8 PERFORMANCE EXCUSED...............................................................................................................94
14.9 COSTS, REVISED TIMETABLE........................................................................................................95
(a) Costs.........................................................................................................................................95
(b) Extension of time/period..........................................................................................................95
14.10 TERMINATION DUE TO FORCE MAJEURE EVENT...........................................................................95
ARTICLE 15...................................................................................................................................................96
EVENTS OF DEFAULT................................................................................................................................96
15.1 EVENTS OF DEFAULT.....................................................................................................................96
(a) The Concessionaire Event of Default......................................................................................96
(b) The Concessioning Authority Event of Default......................................................................98
15.2 PARTIES RIGHTS.............................................................................................................................99
15.3 CONSULTATION NOTICE..............................................................................................................100
15.4 REMEDIAL PROCESS.....................................................................................................................100
15.5 OBLIGATIONS DURING REMEDIAL PERIOD..................................................................................101
15.6 REVOCATION OF CONSULTATION NOTICE...................................................................................101
15.7 TERMINATION DUE TO EVENTS OF DEFAULT...............................................................................101
15.8 CONCESSIONING AUTHORITY’S RIGHTS OF STEP-IN...................................................................102
ARTICLE 16.................................................................................................................................................103
TERMINATION OF THE CONCESSION/AGREEMENT...................................................................103
16.1 TERMINATION PROCEDURE..........................................................................................................103
16.2 OBLIGATIONS DURING TERMINATION PERIOD.............................................................................103
16.3 REQUISITION................................................................................................................................103
16.4 CONDITION SURVEY.....................................................................................................................104
16.5 CONSEQUENCES OF TERMINATION..............................................................................................105
ARTICLE 17.................................................................................................................................................107
COMPENSATION.......................................................................................................................................107
17.1 COMPENSATION...........................................................................................................................107
(a) Termination due to Force Majeure Event..............................................................................107
(b) Termination due to Concessionaire Event of Default...........................................................107
(c) Termination due to Concessioning Authority Event of Default...........................................108
17.2 NO COMPENSATION ON EXPIRY OF CONCESSION PERIOD...........................................................108
17.3 TRANSFER FEE AND CHARGES.....................................................................................................108
17.4 PAYMENT OF COMPENSATION TO LENDERS................................................................................109
17.5 DELAYED PAYMENT OF COMPENSATION.....................................................................................110
17.6 DELAYED TRANSFER OF ASSETS.................................................................................................110
17.7 REMEDIES CUMULATIVE.............................................................................................................111
ARTICLE 18.................................................................................................................................................112
TRANSFER ON EXPIRY OF THE CONCESSION PERIOD..............................................................112
18.1 GENERAL SCOPE OF TRANSFER/PAYMENT..................................................................................112
18.2 CONCESSIONAIRE’S OBLIGATIONS..............................................................................................112
18.3 CONCESSIONING AUTHORITY’S OBLIGATIONS............................................................................113
18.4 RISK.............................................................................................................................................114
ARTICLE 19.................................................................................................................................................115
DISPUTE RESOLUTION...........................................................................................................................115
19.1 AMICABLE SETTLEMENT..............................................................................................................115
19.2 ASSISTANCE OF EXPERT...............................................................................................................115
19.3 ARBITRATION...............................................................................................................................115
(a) Arbitrators...............................................................................................................................115
(b) Place of Arbitration................................................................................................................116
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(c) English Language...................................................................................................................116
(d) Procedure................................................................................................................................116
(e) Enforcement of Award...........................................................................................................116
(f) Fees and Expenses..................................................................................................................117
(g) Performance during Arbitration.............................................................................................117
ARTICLE 20.................................................................................................................................................118
REPRESENTATIONS AND WARRANTIES..........................................................................................118
20.1 REPRESENTATIONS AND WARRANTIES OF THE CONCESSIONAIRE..............................................118
20. 2 REPRESENTATIONS AND WARRANTIES OF THE CONCESSIONING AUTHORITY............................120
20.3 DISCLOSURE.................................................................................................................................121
ARTICLE 21.................................................................................................................................................122
MISCELLANEOUS PROVISIONS...........................................................................................................122
21.1 DATUM.........................................................................................................................................122
21.2 SURVIVAL OF OBLIGATIONS........................................................................................................122
21.3 ARTICLES TO SURVIVE TERMINATION.........................................................................................122
21.4 JOINT RESPONSIBILITY.................................................................................................................122
21.5 SEVERAL OBLIGATIONS...............................................................................................................123
21.6 SEVERABILITY.............................................................................................................................123
21.7 NOTICES.......................................................................................................................................123
21.8 WAIVER........................................................................................................................................124
21.9 AMENDMENTS, MODIFICATIONS OR ALTERATIONS.....................................................................124
21.10 GOVERNING LAW.........................................................................................................................125
21.11 ENTIRE AGREEMENT....................................................................................................................125
APPENDIX 1.................................................................................................................................................127
PROJECT SITE.........................................................................................................................................127
APPENDIX 2.................................................................................................................................................128
PORT’S ASSETS.......................................................................................................................................128
APPENDIX 3.................................................................................................................................................129
SUBSTITUTION AGREEMENT.............................................................................................................129
APPENDIX 4.................................................................................................................................................143
PROJECT REQUIREMENTS...................................................................................................................143
APPENDIX 5.................................................................................................................................................160
PROJECT SCHEDULE.............................................................................................................................160
APPENDIX 6.................................................................................................................................................161
DESIGNS AND DRAWINGS...................................................................................................................161
APPENDIX 7.................................................................................................................................................162
TERMS OF REFERENCE FOR INDEPENDENT ENGINEER.............................................................162
APPENDIX 8.................................................................................................................................................167
PERMITS AND CLEARANCES PROCURED BY THE CONCESSIONAIRE/ CONCESSIONING
AUTHORITY............................................................................................................................................167
APPENDIX 9.................................................................................................................................................168
PERFORMANCE GUARANTEE............................................................................................................168
APPENDIX 10...............................................................................................................................................173
CERTIFICATES........................................................................................................................................173
APPENDIX 11...............................................................................................................................................175
PERSONNEL AND LABOUR REQUIREMENTS................................................................................................175
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APPENDIX 12...............................................................................................................................................176
TARIFFS....................................................................................................................................................176
APPENDIX 13...............................................................................................................................................177
RATES APPLICABLE IN RESPECT OF LAND, UTILITIES AND SERVICES..................................177
APPENDIX 14...............................................................................................................................................178
MINIMUM GUARANTEED CARGO.....................................................................................................178
APPENDIX 15...............................................................................................................................................179
PERFORMANCE STANDARDS.............................................................................................................179
APPENDIX 16...............................................................................................................................................186
ESCROW AGREEMENT.........................................................................................................................186

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CONCESSION AGREEMENT

THIS CONCESSION AGREEMENT is made at ____________ on this the ______ day
of ______________

BETWEEN:

1. BOARD OF TRUSTEES for __________________ PORT, a body corporate
constituted under the provisions of the Major Port Trusts Act, 1963 and having its
Administrative Office at _____________________________________
__________________________________________________________________
__________________________________________________ , hereinafter
referred to as “the Concessioning Authority” (which expression shall, unless
repugnant to the context or meaning thereof, include its successors and permitted
assigns);

AND

2. ___________________________ LIMITED, a company registered under the
Companies Act, 1956, and having its registered office at ____________
__________________________________________________________
hereinafter referred to as “the Concessionaire” (which expression shall, unless
repugnant to the context or meaning thereof, include its successors and permitted
assigns).

WHEREAS:

(A) The Concessioning Authority is desirous of implementing a Project (as defined
hereinafter) for ____________________________________________________1
through private sector participation;

(B) In or about _____________, the Concessioning Authority invited applications

1 To provide in brief the nature of the facilities e.g. Container handling/bulk cargo/liquid cargo/others.
8
from the interested parties in accordance with the Request for Qualification (as
defined hereinafter), to shortlist competent parties that can subsequently bid for
the Project;

(C) In response to the invitation referred to in recital ‘B’ above, the Concessioning
Authority received applications from various parties including the application
dated ________ submitted by the Applicant/ Consortium in accordance with the
Request for Qualification;

(D) The Concessioning Authority, after evaluating all the applications, shortlisted
_______ number of applicants including the Applicant/Consortium and invited
proposals from them in accordance with the Request for Proposal (as defined
hereinafter), for implementing the Project;

(E) In response to the Request for Proposal, the Concessioning Authority received
proposals from the shortlisted applicants including the one submitted by the
Applicant/Consortium;

(F) The Concessioning Authority, after evaluating all the proposals received by it
from the shortlisted applicants, accepted the proposal referred to in recital “E”
above submitted by the Applicant/Consortium and communicated its acceptance
to the Applicant/Consortium vide Letter of Intent for Award of Concession dated
______;

(G) The Applicant/Consortium has/have incorporated the Concessionaire as a special
purpose company in India, under the Companies Act, 1956 to implement the
Project;

(H) Following the issue of the Letter of Intent for Award of Concession, the
Concessioning Authority has agreed to grant the Concession to the Concessionaire
to implement the Project on the terms, conditions and covenants hereinafter set
forth in this Agreement.

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NOW, THIS AGREEMENT WITNESSETH AS FOLLOWS:

ARTICLE 1

DEFINITIONS AND INTERPRETATION

1.1 Definitions

In this Agreement, unless the context otherwise requires the following terms shall
have the following meanings assigned/ascribed thereto: -

“Actual Project Cost” means the actual capital cost incurred by the
Concessionaire on the Project and/or the Project Facilities and Services as
certified by the Statutory Auditor and if the same exceeds the Estimated Project
Cost and/or does not form part of the Financing Plan submitted prior to Financial
Close, the amount of the Estimated Project Cost or in the Financing Plan as the
case may be increased by the amount(s) approved in writing by the Concessioning
Authority.
“Additional Auditor” has the meaning ascribed to it in Article 9.4.

“Additional Cost” means the additional capital expenditure which the
Concessionaire has or would be required to incur and which has arisen as a result
of Change in Law.

“Affiliate” means, with respect to any Party and/or with respect to the Applicant
and/or with respect to any member of Consortium, any other Person directly or
indirectly controlling, controlled by or under common control with such Party,
Applicant and/or member of Consortium. For the purposes of this definition, the
term “control” (including with correlative meaning, the terms “controlled by” and
“under common control with”) as applied to any Party or Applicant or a member
of Consortium, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management of that Party or Applicant or a member
of Consortium whether through ownership of 50 (fifty) % or more of the voting
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