For official use only DRAFT COPY Model Concession Agreement For Railway Annuity Projects Ministry of Railways Government of India For official use only 2 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 3 For official use only 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 4 For official use only 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 5 For official use only 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 6 For official use only 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 7 For official use only 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 8 For official use only 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 9 For official use only 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 10