Term Sheet For The Operation and Maintenance Agreement Annexure - Operating Agreement
Term Sheet For The Operation and Maintenance Agreement Annexure - Operating Agreement
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
[CONCESSIONAIRE];
and
[OPERATOR.
1.1.2. any reference to the singular includes the plural and vice versa;
and
1.1.3. any reference to natural persons includes legal persons and vice
versa;
1.2. the following terms and expressions shall have the meanings assigned to
them hereunder and cognate expressions shall have a corresponding
meaning -
PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC) Reviewed by:
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
1.2.4. "the concession area" means the concession area to which the
concession contract applies from time to time;
1.2.8. "the consumer rules" means the consumer rules governing the
supply of water services to consumers as published by the
Concessionaire in terms of the concession contract from time to
time;
Page 2 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
1.2.13. "expansion areas" means any area outside the developed areas
but within the concession area which, in terms of the
concession contract, is to be supplied with water services;
1.2.14. "lender" means any entity who qualifies as a "lender" under the
concession contract;
1.2.15. "new area" means any geographic area outside the concession
area which may in future be incorporated into the concession
area;
Page 3 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
1.3. save as otherwise defined in 1.2, all expressions defined in the concession
contract shall bear the meaning in this agreement as is assigned to such
expressions in the concession contract;
1.5. expressions defined in this clause 1 shall bear the same meaning in any
appendices to this agreement which do not otherwise contain their own
definitions;
1.6. where any words and/or expressions are defined within the context of any
particular clause in this agreement, the words and/or expressions so
defined shall bear the meaning assigned to such words and expressions in
that clause, notwithstanding that such words and/or expressions have not
been defined in this interpretation clause.
2. INTRODUCTION
Page 4 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
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PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
2.3. This agreement sets out the basis on and terms and conditions subject to
which -
as envisaged in 2.2.2.
3. CONDITIONS PRECEDENT
3.1. This agreement, in its entirety, is subject to the conditions precedent that
all the conditions precedent to which the concession contract is subject
(save for the requirement of this agreement becoming effective), are
timeously fulfilled or waived, as the case may be, and that the concession
contract becomes fully binding and unconditional on the parties thereto.
3.2. If the conditions precedent set out in 3.1 is not fulfilled timeously and is
not waived, then this agreement shall automatically lapse and be of no
further force or effect and -
Page 5 of 42
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PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
3.2.2. no party shall have any claim against the other arising out of or
in connection with this agreement.
3.3. The parties undertake to do all things within their power and to take all
reasonable steps as expeditiously as possible in order to ensure fulfilment
of the conditions precedent set out in 3.1 and to give effect to the
provisions of this clause 3.
for the duration of and upon the terms and conditions more fully set out in
this agreement, which appointment the Operator hereby accepts.
4.2.1. shall perform its obligations in terms of this agreement using all
the skill, care and diligence to be expected of a properly
qualified and competent operator experienced in -
Page 6 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
Page 7 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
4.2.7. shall -
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
5. DURATION
5.1. This agreement shall -
5.2. Should -
Page 9 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
5.3. The provisions of 5.2.1 shall constitute an agreement by the Operator and
the Concessionaire for the benefit of Council on the basis that Council
shall be entitled to the benefits set out therein, which are capable of
acceptance and enforcement by Council at any time hereafter and
furthermore on the basis that, upon such acceptance and enforcement by
Council, Council shall become liable for all obligations set out in this
agreement.
Page 10 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
6. NATURE OF APPOINTMENT
6.1. The Operator's appointment in terms of this agreement is an exclusive one
and, accordingly, for the duration of this agreement the Concessionaire
shall not be entitled to appoint any other third party, nor shall the
Concessionaire itself be entitled, to perform any of the services to be
performed by the Operator in terms of or pursuant to this agreement.
6.2. The Operator is hereby appointed on the basis that the Operator will, as an
independent contractor -
for and on behalf of the Concessionaire on the basis more fully set out in
this agreement.
6.3. Accordingly, as at the date that this agreement is signed by the party
signing last in time and at all times subsequent thereto, both parties are
acting as principals and nothing herein contained shall be construed as
constituting -
and each party shall accordingly not be entitled to incur any liability on
behalf of or to bind the credit of the other party in any manner save as may
be provided for in this agreement and each party hereby indemnifies and
holds the other party harmless against any and all claims which may arise
by virtue of such firstmentioned party having breached this clause 6.3.
6.4. The Operator shall use its best endeavours to ensure that all material sub-
contracts concluded by it with sub-contractors and relating to or associated
with the supply of water services or the operation and maintenance of the
works subsequent to or that will be implemented with effect from the
effective date shall include a clause stipulating expressly the right of the
substitute entity appointed (or, if no substitute entity is appointed, the right
of Council) to continue with such contracts in force at the time of the
Page 11 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
7.2. The Operator shall, accordingly, only be obliged to undertake the supply
of water services in terms of this agreement -
Page 12 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
8.1.4. comply with and give all notices required by or under the
regulatory provisions relating to its activities in terms of this
agreement and the concession contract;
8.1.5. comply with all legislation, laws, policies and the regulatory
provisions relating to the conclusion and implementation of this
agreement.
8.2. The Concessionaire shall and hereby undertakes to assist, on request, the
Operator in its dealings with Council and all competent authorities in
implementing this agreement and in the Operator rendering any service
under this agreement and shall procure that Council shall do likewise.
PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC) Reviewed by:
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
9.1.2. allow the Operator full and free access to the works as from the
effective date or such other date as the Concessionaire obtains
such access from Council in terms of the concession contract;
9.1.3. allow the Operator full and free use, occupation, possession and
enjoyment of the immovable concession assets listed in
Appendix 4 as from the effective date or such other date as the
Concessionaire obtains such use, occupation, possession and
enjoyment from Council in terms of the concession contract;
and
9.1.4. allow the Operator to enjoy the undisturbed use and possession
of and be entitled to the full benefit of all the rights under the
contracts referred to in 50.1 of the concession contract as from
the effective date,
9.3.1. from time to time supply all further equipment (but excluding
new assets), materials, chemicals, consumables and any other
items whatsoever, whether of a temporary or permanent nature,
which it may require for the proper performance of its
obligations in accordance with this agreement (collectively
"Operator equipment"); and
PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC) Reviewed by:
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
9.5. The amount(s) due to the Operator in terms of 15.1 excludes allowances
for the payment of any import and re-export duties and taxes and any other
similar tax, charge, impost, levy or duty ("import taxes") levied on the
Operator in connection with the importation of any Operator equipment
referred to in 9.3.2 and, in the event that any such import taxes may be or
become payable, the Concessionaire shall -
9.5.1. pay the full amount thereof to the relevant authority or other
entity concerned within the time allowed for such payment
under applicable law so as to allow the relevant equipment,
material, chemical, consumable and/or other item to be
imported by the Operator and to be cleared for import timely;
and
9.6. Should the Concessionaire fail to comply with its obligations in terms of
9.5, then, without prejudice and in addition to any other right or remedy
that the Operator may have in terms of this agreement or at law as a result
thereof, the Operator shall be entitled to pay the relevant import taxes to
the relevant authority or other entity concerned, in which event the
Page 15 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
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PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
10.2. The Concessionaire shall grant to and/or procure for the Operator, as the
case may be, a right of way or other method of access to and egress from
all land not owned by the Concessionaire but on which any of the
concession assets is situated.
Page 16 of 42
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PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
11.1.4. ensure that all its employees working on the operation and
maintenance of the works and the supply of water services
within the concession area are properly trained and qualified,
competent and experienced to carry out their respective
responsibilities;
11.1.5. timeously procure and acquire all items which may be needed
by the Operator to fulfil its obligations under this agreement.
The equipment and replacement parts so procured and acquired
shall be of suitable size and type and in accordance with the
specifications for the works; and
11.1.6. from time to time procure and supply such further appropriate
replacements for the equipment as and when necessary to
enable the Operator to perform its obligations hereunder, it
being understood that all cost and expenses relating thereto
shall be borne by the Concessionaire.
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PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
11.2.1. at all times that it has sufficient staff and resources as may be
necessary to ensure the proper and timely performance by the
Operator of all its obligations in terms of this agreement; and
11.3. The Operator shall furthermore adhere to and implement the provisions of
clauses 26, 51 and 52 of the concession contract to the extent that those
provisions apply to the Operator and will render all necessary assistance to
the Concessionaire with its obligations under those provisions.
PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC) Reviewed by:
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PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
12.2. During the currency of any construction contract (including any defects
liability period mentioned or referred to therein) the Operator shall allow
the relevant contractor access to the works in order that the contractor may
carry out and execute, in accordance with the provisions of the relevant
construction contract, all work (including remedial work) in terms of the
construction contract.
12.3. During the currency of this agreement, the Concessionaire shall not
appoint any contractor or conclude any construction or other agreement in
relation to the works otherwise than on the basis set out herein.
13.2. The Concessionaire shall, as from the effective date and for the duration of
this agreement thereafter, adhere to the terms and conditions set out in
Page 19 of 42
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PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
14.2. To the extent that the operation and maintenance manuals referred to in
14.1 are not complete and to the extent that the works are extended or
modified during the currency of this agreement, the Operator shall -
15.1.2. reimburse the Operator for the costs, expenses and other
outgoings,
15.2. The Operator shall furnish the Concessionaire, on or before the last day of
each month during the continuance of this agreement (or at such other
times or intervals as the Operator may deem fit), with a statement setting
out the amounts due and payable by the Concessionaire to the Operator for
the period covered by such statement.
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PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
15.3. The Concessionaire shall pay the full amount set out in each statement
furnished by the Operator to the Concessionaire in terms of 15.2 by no
later than 5 (five) days after the date of each such statement.
15.4. All payments made by the Concessionaire to the Operator in terms of the
provisions of this agreement shall be made in cash, without the cost of
transfer of funds, without any deduction or set-off of whatsoever nature
and otherwise in accordance with the Operator's written payment
instructions from time to time.
15.5. Where any payment due to be made by the Concessionaire to the Operator
in terms of this agreement falls due on a day which is not a business day
(being any calendar day excluding Saturdays, Sundays and public holidays
in [COUNTRY]), then such payments shall be made on the last business
day preceding such due date.
15.6. Should the Concessionaire fail to make full or timeous payment of any
amount due in terms of this agreement on the due date therefor, the
Operator shall be entitled to charge and receive interest on the amount
outstanding, calculated from the due date to the date on which the amount
is actually paid in full, at a rate of 2% (two per centum) above the publicly
quoted annual prime rate of interest from time to time levied by the
Operator's commercial bankers (as certified by any manager of that bank,
whose authority and/or appointment and/or qualifications need not be
proved), which interest shall be calculated, capitalised and compounded
monthly in arrear.
PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC) Reviewed by:
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PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
15.10. If any amount is not paid on due date, then the Operator shall be entitled,
without prejudice and in addition to any other right or remedy that it may
have in terms of this agreement or at law, to immediately suspend the
carrying out of its obligations in terms of this agreement pending
payment of the unpaid amount in full.
15.11. The Concessionaire shall be responsible for any and all consequences of
any suspension referred to in 15.10 and any subsequent resumption of
work by the Operator (specifically including, but not limited to any and
all costs, expenses, losses and/or damages incurred and/or suffered by the
Operator in respect thereof or in relation thereto) and the Concessionaire
hereby indemnifies and holds the Operator harmless against same.
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CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
16. INSURANCE
The Concessionaire shall effect and maintain for the duration of this agreement
the insurances reflected on the insurance schedule annexed hereto marked
Appendix 7 in accordance with the terms and conditions reflected therein and
such additional insurances as may be required from it under the concession
contract and shall at all times ensure that the Operator is listed as a co-insured of
each such insurance and each insurance policy so effected.
17. LIABILITY
17.1. The Operator shall only be liable to the Concessionaire for the fulfilment
and discharge of all obligations and requirements for the supply of water
services in accordance with this agreement.
17.2. The Operator shall take all reasonable precautions for the protection of
life and property on or about or in any way connected with the whole or
any part of the works and the supply of water services and shall
indemnify and hold the Concessionaire harmless against all losses,
claims, demands, proceedings, damages, costs, charges and expenses
(including reasonable legal expenses on a full indemnity basis) of
whatsoever nature arising out of its actions and/or omissions under this
agreement in respect of injury to or death of any person or loss of or
damage to any asset or any person or property accruing after the effective
date but prior to the termination of this agreement unless such injury,
death, loss or damage was caused by any act or omission of Council, the
Concessionaire or any of their agents or representatives or other third
parties for whom they are responsible in law, to the extent that the
Operator is able to recover any such amount from the insurance cover
referred to in 16.
Page 23 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
17.4.2. for the payment of any damages, claims and/or losses due
to any act or omission of the Operator and shall indemnify
and hold the Concessionaire harmless for all losses,
damages, penalties, legal fees and costs and expert's fees
and costs due to a breach of this undertaking, to the extent
that the Operator is able to recover any such amount from
the insurance cover referred to in 16.
17.5. The Concessionaire shall give the Operator notice of any claim envisaged
in 17.4 that comes to its notice. The Operator shall be obliged to
intervene and take over the defence of any such claim and shall assume
responsibility in respect of any action or right that is instituted against the
Concessionaire in respect of any acts or omissions of the Operator in
respect of the supply or failure to supply water services and/or the works
that may occur with effect from the effective date (including, but not
limited to, the responsibility and sole ability to determine whether to
make any admission and/or settle any claim made). The Concessionaire
shall co-operate with the Operator in every reasonable way to facilitate
the defence by the Operator of any such claim and all negotiations for the
settlement or compromise thereof, on the basis that the Operator shall
control any litigation and that the Concessionaire shall not settle any such
litigation without the Operator's consent. Such co-operation shall, if
reasonably necessary, include the right of the Operator to institute
proceedings or to counterclaim in the name of the Concessionaire,
provided that the Operator shall first furnish to the Concessionaire, and
Page 24 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
17.6. The Concessionaire hereby indemnifies and holds the Operator harmless
against all losses, claims, demands, proceedings, damages, costs, charges
and expenses (including reasonable legal expenses on a full indemnity
basis) of whatsoever nature arising out of the Concessionaire's actions
and/or omissions under this agreement and/or the concession contract and
those of its agents or representatives or other third parties for whom the
Concessionaire is responsible in law. The provisions of this clause 17.6
shall survive termination of this agreement.
18. SANCTIONS
18.2. The provisions of 18.1 shall not apply where the breach referred to in
18.1 was occasioned by or partly occasioned by any act or omission of
the Concessionaire or any of its directors, shareholders, employees,
agents, sub-contractors or other third parties for whom it is legally
responsible.
19.1. the Operator or its servants be liable for any indirect, special or
consequential loss or damage of any kind whatsoever or howsoever
caused (whether arising under contract, tort or otherwise and whether the
loss was actually foreseen or reasonably foreseeable), sustained by the
other party, including but not limited to any loss of profits, loss of
operation time, interruption or loss of information and/or loss of
contracts; and
Page 25 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
21. INSPECTION
The Operator shall, at all times -
21.1. allow -
reasonable access to the works and to all workshops and places where
work is being prepared or where materials, manufactured articles and
machinery are being obtained for the works; and
21.2. afford any necessary facility for and assistance in obtaining the right to
such access.
Page 26 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC) Reviewed by:
LEGPS
http://www.worldbank.org/ppp June 2008
This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC) Reviewed by:
LEGPS
http://www.worldbank.org/ppp June 2008
This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
22.5. Any and all information which is acquired by one party pursuant to the
implementation of this agreement, in whatever form or from whatsoever
source (specifically including, but not limited to, information verbally
communicated), shall be deemed to be confidential information and shall
be subject to the provisions contained herein.
Page 29 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
22.7. In order to protect the confidential information of the parties, each party
hereby undertakes -
Page 30 of 42
PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC) Reviewed by:
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
Page 31 of 42
PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC) Reviewed by:
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http://www.worldbank.org/ppp June 2008
This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
23.1.3. all copyright and other intellectual property rights in, to and
in respect of thereof,
PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC) Reviewed by:
LEGPS
http://www.worldbank.org/ppp June 2008
This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
24.3. The indemnities set out in 24.1 and 24.2 shall extend to all costs and
expenses (including reasonable legal expenses on a full indemnity basis)
incurred by the party who has been indemnified ("the indemnified
party") as a result of any such claims.
24.4. The indemnified party shall give to the indemnitor prompt notice in
writing of any claim being made or action threatened or brought against it
and shall permit the indemnitor (at the indemnitor's expense) to conduct
any litigation which may ensue and all negotiations for a settlement of
any claim, giving the indemnitor all reasonable assistance (at the
indemnitor's expense) and the indemnified party agrees not to make any
admission which might be prejudicial thereto.
24.5. The conduct by the indemnitor of any such litigation or negotiations shall
be conditional upon its taking over such conduct within a reasonable time
after being notified of the claim in question.
Page 33 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
24.7. To the extent that it is not possible or practical for the Operator to replace
or modify the works and/or its operations or to obtain a licence as
envisaged in 24.6, the Concessionaire shall forthwith notify Council and
the lenders as envisaged in clause 48.7 of the concession contract and the
provisions of the said clause 48.7 will apply mutatis mutandis to this
agreement.
Page 34 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
25.2. Prior to the Concessionaire exercising any right to cancel and terminate
this agreement, it shall deliver a written notice to Council, each lender
and the Operator notifying them of the breach giving rise to such right
and requesting the Operator to remedy the breach in question within a
period of 60 (sixty) days of the date of receipt of such notice, or such
longer period stipulated in the notice if the breach in question cannot
reasonably be remedied by the Operator within a 60 (sixty) day period of
the date of receipt of such notice, provided that no such notice shall be
required where the breach complained of is one contemplated in 25.1.2 or
25.1.4 in circumstances where the Operator fails to supply any water
services for a continuous period of 5 (five) days.
Page 35 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
26.2. such breach be capable of being remedied and should the Concessionaire
thereafter fail and/or refuse to remedy the breach in question within 60
(sixty) days after receipt if a written notice from the Operator requiring
such breach to be remedied,
then, without prejudice to the other rights or remedies of the Operator in terms
hereof or at law, the Operator shall be entitled to cancel and terminate this
agreement forthwith on written notice to such effect to the Concessionaire,
Council and each lender.
PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC) Reviewed by:
LEGPS
http://www.worldbank.org/ppp June 2008
This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
27.2. The party affected by an event of force majeure shall promptly notify the
other in writing of the occurrence of an event of force majeure and the
estimated extent and duration of such party's inability to perform its
obligations as envisaged in 27.1.
27.4. In the event of any delay caused by an event of force majeure, the term of
this agreement as set out in 5.1 shall automatically be extended by a time
period equal to the time period with which the contract term of the
concession contract has been extended in circumstances where such an
event of force majeure also qualifies as "an event of force majeure" in
terms of the concession contract.
27.5. To the extent that the consequences of an event of force majeure are
covered by the insurance policies referred to in 16, the Operator shall
assist the Concessionaire to make the appropriate claims thereunder and
the Concessionaire shall, subject to the provisions of the concession
contract, apply such insurance proceeds to off-set the impact and effect of
the event of force majeure.
Page 37 of 42
PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC) Reviewed by:
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
28.1. all amounts due to the Operator under or in terms of this agreement
(including, but not limited to, the full demobilisation and other similar
costs and expenses of and/or incurred by the Operator in winding down
its operations) shall forthwith be payable and the Concessionaire shall
forthwith effect payment thereof to the Operator;
Page 38 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
29.2.1. with only the legal and other representatives of the parties
to the dispute, the witnesses (both expert and otherwise) to
be called during the arbitration hearing, the parties
themselves and, if so required by the lenders, the lenders
and their legal and other representatives and the arbitrator
present thereat and the arbitrator shall be entitled to permit
a translator, a stenographer and like officials to attend the
arbitration hearing;
29.2.2. in [LOCATION],
and it is the intention that the arbitration shall, where possible, be held
and concluded in 21 (twenty one) working days after it has been
demanded. The parties shall use their best endeavours to procure the
expeditious completion of the arbitration.
Page 39 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
29.5. The parties shall keep the evidence in the arbitration proceedings and any
order made by any arbitrator confidential unless otherwise contemplated
herein, save for the purpose of making such order an order of court.
29.6. The arbitrator shall be obliged to give his award in writing fully
supported by reasons.
29.7. The provisions of this clause are severable from the rest of this agreement
and shall remain in effect even if this agreement is terminated for any
reason.
29.8. The arbitrator shall have the power to give default judgment if any party
fails to make submissions on due date and/or fails to appear at the
arbitration.
Page 40 of 42
PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC) Reviewed by:
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
30. NOTICES
30.1.1 All notices and other communications under this Agreement to any party
to this Agreement shall be deemed to be duly given or made when given in
writing and: -
30.1.1.2 when despatched in the case of telex (provided the relevant answer
back is received); or
in each case to such party addressed to it at the address given below or at such
address as such party may after the date of this agreement specify in writing for
such purpose to the other parties to this agreement by notice in writing.
the Operator:
[ ]
for the attention of [ ]
Fax: [ ]
Concessionaire:
[ ]
for the attention of [ ]
Fax: [ ]
30.2A written notice includes a notice by facsimile provided that a copy by way of
confirmation is also delivered by personal delivery or post.
Page 41 of 42
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This document has been prepared for the purposes of the PPP IN INFRASTRUCTURE RESOURCE CENTER FOR
CONTRACTS, LAWS AND REGULATIONS (PPPIRC) website. It is a sample document FOR REFERENCE
PURPOSES ONLY and SHOULD NOT BE used as a "model". The inclusion of any legal materials on the PPPIRC
website does not mean that they are in any way approved, endorsed or recommended by the World Bank Group or its
affiliates. Legal advice should be sought to determine whether a particular legal document is appropriate for any given
project, and how the specific terms of the document should be adapted to fit the circumstances of that project.
32. COSTS
Each party shall bear and pay its own costs of and incidental to the negotiating,
drafting, preparing and implementing of this agreement and the transactions set
out herein.
Page 42 of 42
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