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Example clauses

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Handover of Project facility

Handover and Defect Liability Period

(a)   Upon the expiry of the Concession Period by efflux of time and in the normal course, the Concessionaire shall at the end of the Concession Period, hand over vacant and peaceful possession of Project Site/Project Facility to the Authority free of cost, in accordance with the Handback Requirements. 

(b)  The process of handing over shall be initiated at least 18 months before the actual date of expiry of the Concession Period by a joint inspection by the Authority, the Independent Engineer and the Concessionaire ("Initial Inspection"). 

Within fourteen (14) days after the completion of the Initial Inspection the Independent Enginee hall provide Concessionaire and the Authority with a notice (the "Handback Proposals") setting out:

(a)  A schedule of dilapidations on the condition of the Project Facilities;

(b)  Determination as to the maintenance works or other works of renewal, reconstruction, repair or reinstatement (the "Renewal Works") required to be carried out in respect of the Project Facilities in order to procure that, on expiry of the Concession Period, the Project Facilities shall comply with the Handback Requirements;

(c)  Determination as to the programme (the "Renewal Construction Progamme") for carrying out the Renewal Works over the remainder of the Concession Period; and

(d)  Determination as to the cost of carrying out the Renewal Works (the "Renewal Amount").

The Handback Proposals shall be made, amongst other things, on the assumption that the Project Facilities shall be maintained in accordance with the O & M Requirement .

Upon receipt of the Independent Engineer's determinations as to the Renewal Works, the Renewal Construction Programme and the Renewal Amount:

(a)  Concessionaire shall, within fourteen (14) days of the receipt of such determinations, provide a bond in an amount equal to the Renewal Amount from a bank or insurance company which is authorised to carry on business in [country] ("Renewal Amount Bond") or provide such other security as the Authority and Concessionaire may agree;

(b)   Concessionaire shall ensure that the Renewal Works are carried out in accordance with the Renewal Construction Programme; and

(c)   Concessionaire's right to receive any payment under this Agreement or any other agreement between it and the Authority shall be suspended (and no interest shall in any event be payable in respect of the suspension period) from the fifteenth (15th) day following the receipt of the Expert's determinations until the Renewal Amount Bond of other security required under sub-clause (a) is duly executed and delivered to the Authority.

To avoid doubt, Concessionaire shall procure at its own cost that the Renewal Works are carried out even if the actual cost of the Renewal Works may be higher than the Renewal Amount.

Handback Procedure

On the day on which the Concession Term expires the Independent Engineer shall conduct a further inspection of the Facilities. The inspection shall comply with the requirements set out in this Agreement.

Within seven (7) days after the completion of the inspection referred to in the preceding sub-clause, the Independent Engineer shall either;

(a)  Issue a Handback Certificate to Concessionaire with a copy to the Authority; or

(b)  Notify Authority of its decision not to issue a Handback Certificate and state the reason for that decision (a "Handback Deficiency Notice").

Th ndependent Enginee hall not issue the Handback Certificate if:

(a)  Concessionaire shall have failed to complete all of the Renewal Works; or

(b)  Facilities for any other reason do not comply with any material aspect of the Handback Requirements.

Any Handback Deficiency Notice shall describe each way in which the Renewal Works have not been completed or the Facilities do not comply with the Handback Requirements and shall state the cost of completing those Renewal Works and/or of procuring that the Facilities fully comply with the Handback Requirements. If the cost of completion of the Renewal Works exceeds the Renewal Amount Concessionaire shall, as the case may be, either increase the value of the Renewal Amount Bond by the excess or post a bond (or other security) ("Handback Deficiency Bond") whose face value equates such excess.

If Concessionaire has not completed the Renewal Works or the Facilities do not fully comply with the Handback Requirements, then without prejudice to any other right or remedy of the Authority, the Authority shall be entitled to draw down the Renewal Amount Bond (increased as above), Handback Deficiency Bon nd/ or the last Availability Payment as the case may be.

Despite the provisions of this clause, the Authority may in its absolute discretion direct that all or any part of the Renewal Works, shall not be carried out. If the Authority gives that direction the value of the work which is not to be done shall be deducted from the amount (if any) secured by the Renewal Amount Bond or Handback Deficiency Bond and Concessionaire shall be entitled to the amount by which the Renewal Amount Bond or Handback Deficiency Bond is reduced.

If the Independent Engineer issues a Handback Certificate under clause [ref], the Authority shall promptly return to Concessionaire the value of the Renewal Amount Bond.

On the completion of the Renewal Works, or on Concessionaire making payment to the Authority in respect of any additional work required by this clause, the Authority shall return to Concessionaire the bonds provided under this clause.

See SOPC Section 8.3, 8.4 and 19 (treatment of assets).

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

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