Content Headings

Key Issues

Example clauses

Notes and References

Consequences of termination

The government needs to ensure that the concession agreement include adequate provisions for ongoing delivery of public services or the implementation of other suitable arrangements to cover for events where termination becomes necessary.  These arrangements will require the outgoing concessionaire to cooperate fully with the government during any transaction period.

Alternative 1

Termination

Notwithstanding any provision of this Agreement, on service of a notice of termination, this Agreement shall only terminate in accordance with the provisions of this Clause.

Continued effect - no waiver

Notwithstanding any breach of this Agreement by either party, and without prejudice to any other rights which the other party may have in relation to it, the other party may elect to continue to treat this Agreement as being in full force and effect and to enforce its rights under this Agreement.  The failure of either party to exercise any right under this Agreement, including any right to terminate this Agreement and any right to claim damages, shall not be deemed a waiver of such right for any continuing or subsequent breach.

Continued performance

Subject to any exercise by the Authority of its rights to perform, or to procure a third party to perform, the obligations of Concessionaire, the parties shall continue to perform their obligations under this Agreement, notwithstanding the giving of any notice of default or notice of termination, until the termination of the Agreement becomes effective in accordance with the provisions of this Clause.

Transfer to the Authority of Assets, Contracts etc.

On the service of a notice of termination in accordance with this Agreement for any reason:

(a)  if prior to the Actual Completion Date, in so far as any transfer shall be necessary fully and effectively to transfer property to the Authority, Concessionaire shall transfer to, and there shall vest in, the Authority, such part of the Works and/or the Facilities as shall have been constructed and such items of the Plant and [add project specific items] as shall have been procured by Concessionaire if the Authority so elects:

(b)   all goods and all materials on or near to the Site not yet incorporated in the Works shall remain available to the Authority for the purposes of completing the Works and if the cost of such goods and materials has not been reflected in the payment of any compensation pursuant to Schedule [Compensation on Termination], subject to the payment by the Authority (determined as between a willing vendor and willing purchaser with any disputes determined pursuant to Clause [Dispute Resolution Procedure]);

(c)   the construction plant shall remain available to the Authority for the purposes of completing the Works, subject to payment of the Concessionaire's reasonable charges;

(d) Concessionaire shall hand over to, and there shall vest in, the Authority, free from all encumbrances, the Facilities [include project specific provisions re IT and Equipment etc] (which in the case of the termination of this Agreement in accordance with Clause [Non-Default Termination - Expiry] shall be in the state required in accordance with Schedule [Handback Procedure]);

(e)  if the Authority so elects, Concessionaire shall procure that any of the Construction Contract, the Service Contracts and/or the Independent Tester Contract shall be novated or assigned to the Authority, provided that where termination occurs under Clause [Authority Events of Default] the consent of the Concessionaire, the Service Provider or the Independent Tester (as the case may be) shall be required;

(f)  Concessionaire shall, or shall procure that any Contracting Associate shall (as the case may be), offer to sell to the Authority at a fair value (determined as between a willing vendor and willing purchaser, with any disputes as to such fair value being determined pursuant to Schedule [Dispute Resolution Procedure]), free from any security interest with full title guarantee all or any part of the stocks of material and other assets, road vehicles, spare parts and other moveable property owned by Concessionaire or any of its Contracting Associates and reasonably required by the Authority in connection with the operation of the Facilities or the provision of the Services [or Interim Services];

(g)  Concessionaire shall deliver to the Authority (as far as not already delivered to the Authority) one complete set of:

(i)  "as built drawings" showing all alterations made to the Facilities since the commencement of operation of the Facilities; and

(ii)  maintenance, operation and training manuals for the Facilities;

(h)  Concessionaire shall use all reasonable endeavours to procure that the benefit of all manufacturer's warranties in respect of mechanical and electrical plant and equipment used or made available by Concessionaire under this Agreement and included in the Facilities are assigned, or otherwise transferred, to the Authority with full title guarantee; and

(i)  Concessionaire shall deliver to the Authority information equivalent to the information it is required to provide in accordance with Clause [Employment matters] and Clause [Pension Matters] in relation to the employees employed by Concessionaire and/or Service Providers and the records referred to in Clause [Records and Reports] except where such documents are required by Law to be retained by Concessionaire or its Contracting Associates (in which case complete copies shall be delivered to the Authority).

Concessionaire shall ensure that provision is made in all contracts of any description whatsoever to ensure that the Authority will be in a position to exercise its rights, and Concessionaire will be in a position to comply with its obligations, under Clause [ref].

Termination

On completion of the transfer required by Clause [ref] (except in so far as any of the requirements of that Clause may be waived by the Authority), this Agreement shall terminate and, save as provided in Clause [Continuing obligations], all rights and obligations of the Authority and Concessionaire under this Agreement shall cease and be of no further force and effect.

Transitional arrangements

On the termination of this Agreement for any reason, for a reasonable period both before and after any such termination, Concessionaire shall have the following duties:

(a)  Concessionaire shall co-operate fully with the Authority and any successor providing to the Authority services in the nature of any of the Services [or Interim Services] or any part of the Services [or Interim Services] in order to achieve a smooth transfer of the manner in which the Authority obtains services in the nature of the Services [or Interim Services] and to avoid or mitigate in so far as reasonably practicable any inconvenience or any risk to the health and safety of the employees of the Authority and members of the public;

(b)  Concessionaire shall as soon as practicable remove from the Site all property not acquired by the Authority pursuant to Clause [ref] (or not belonging to the Authority or any Authority Party) and if it has not done so within forty (40) Business Days after any notice from the Authority requiring it to do so the Authority may (without being responsible for any loss, damage, costs or expenses) remove and sell any such property and shall hold any proceeds less all costs incurred to the credit of Concessionaire;

(c)  Concessionaire shall forthwith deliver to the Authority's Representative:

(i)  any keys to the Facilities; and

(ii)  without prejudice to Clause [Intellectual Property], any copyright licences for any computer programmes (or licences to use the same) necessary for the operation of the Facilities (but excluding computer programmes, which have been developed or acquired by a Service Provider for its own use and not solely for the purposes of provision of any of the Services at the Facilities or the assignment or transfer of which is otherwise restricted); and

(d)  Concessionaire shall as soon as practicable vacate the Site and (without prejudice to Schedule [Handback Procedure]) shall leave the Site and the Facilities in a safe, clean and orderly condition.

If the Authority wishes to conduct a competition prior to the Expiry Date with a view to entering into an agreement for the provision of services (which may or may not be the same as, or similar to, the Services or any of them) following the expiry of this Agreement, Concessionaire shall co-operate with the Authority fully in such competition process including (without limitation) by:

(a)  providing any information which the Authority may reasonably require to conduct such competition but, to avoid doubt, information which is commercially sensitive to Concessionaire shall not be provided (and, for the purpose of this Clause, commercially sensitive shall mean information which would if disclosed to a competitor of Concessionaire give that competitor a competitive advantage over Concessionaire and thereby prejudice the business of Concessionaire but shall, to avoid doubt, exclude any information referred to in Clause [Employment matters]); and

(b)   assisting the Authority by providing all (or any) participants in such competition process with access to the Site and the Facilities.

Continuing Obligations

Save as otherwise expressly provided in this Agreement:

(a)  termination of this Agreement shall be without prejudice to any accrued rights and obligations under this Agreement as at the date of termination; and

(b)  termination of this Agreement shall not affect the continuing rights and obligations of Concessionaire and the Authority under Clauses [Indemnities and Liability, Limits on Liability, Nature of Land Interests, Employment Matters, Payment, Insurance, Force Majeure, Non-Default Termination and Transitional Arrangements Compensation on Termination, Intellectual Property, Confidentiality, Taxation, Corrupt Gifts and Payments, Records and Reports, Dispute Resolution Procedure, Notices, Mitigation and Governing Law and Jurisdiction] or under any other provision of this Agreement which is expressed to survive termination or which is required to give effect to such termination or the consequences of such termination.

Alternative 1 adapted from Department of Health (UK), Standard Form Project Agreement Index reference A1 Folder 1.

Alternative 2

Following issue of Termination Notice by either Party, the Parties shall promptly take all such steps as may be necessary or required to ensure that:

(a)   until Termination the Parties, to the fullest extent possible, discharge their respective obligations so as to maintain the continuity of service to the users of the Project Facility, 

(b)   the Termination Payment, if any, payable by Authority in accordance with Clause [ref] is paid to the Concessionaire on the Termination Date and 

(c)   the Project/Project Facility is handed over to the Authority by the Concessionaire on the Termination Date free from any Encumbrance. 

Alternative 2 adapted from Concession Agreement for Colombo Kathunayake Expressway Project (note confidential), index reference A2, folder 1.