4.2.3  Project Contracts

The Partnership Contract is the legally binding document that the Preferred Bidder will have to sign with the Government Entity if awarded the project. It must be ensured that the draft of the contract is flexible enough in order to accommodate necessary changes that will arise during negotiation and throughout the project's lifecycle.

A draft contract must be attached to the RfP, allowing Bidders, finance providers and their legal advisors to examine the contents and provide their comments and mark-ups on. Any redrafting of the contract will be solely at the discretion of the Government Entity, which must consent to all changes, and must obtain approval from the Department of Finance and the Supreme Fiscal Committee for any material Deviations. As outlined in Article 26 of the Law, the Project Contract must contain the following fundamental provisions:

  The type and scope of the works and services that must be performed by the Project Company;

  The ownership of Assets and intellectual property rights pertaining to the Project, obligations of parties pertaining to the handover of the Project site, and provisions pertaining to the transfer of ownership upon expiry of the term determined in the Partnership Contract;

  The responsibility for obtaining licences, permits, and approvals;

  The mutual financial and technical obligations of both contracting parties and financing methods;

  The rules governing the sale price of the product or charges of the service on which the Project is based, and the principles and rules of determining and changing such price or charges;

  The quality assurance methods; financial, administrative, and technical audit and supervision tools required for operating, utilising, and maintaining the Project; and, the performance indicators of the Project Company;

  The rules regulating the right of a Government Entity to revoke or amend a Partnership Contract, compliance by the Project Company with these amendments, and grounds or methods of compensation in the event of such amendment;

  The types and amounts of insurance covering the Partnership Project and its operational and utilisation risks, the performance guarantees provided to the Government Entity, and the provisions and procedures related to refunding these guarantees;

  The bases for the distribution of Project risks in cases of force majeure, emergency situations, or material hardships, and the grounds for assessment of the relevant compensation;

  The term of contract; cases of early, partial, or complete termination; and, the rights and obligations of the parties;

  The cases where a Government Entity may unilaterally terminate the contract;

  The penalties that may be imposed on a Project Company if it fails to meet its contractual obligations;

  The rules and procedures for recovering the Project upon expiry, unilateral termination, or early or partial termination of the contract;

  The procedures for ensuring continuity of the Project and works subject matter of the Partnership Contract upon expiry or revocation of the contract, or upon failure by the Project Company to meet its contractual obligations;

  The provisions related to using the services of the employees of government entities at the Project Company, and allocation of a percentage of UAE nationals in such companies;

  Measures that must be taken by the Project Company to preserve the environment;

  Specifications of the end product, the service level that the Project Company must comply with, including performance indicators, safety, security, environmental, and any other standards, and electronic systems and programmes that must be used by the Project Company; and,

  Any other obligations determined by the Supreme Fiscal Committee, the Department of Finance, or the Government Entity in accordance with the resolutions issued by such entities in this respect.

In addition, all other documentation, which will differ according to the type of the Project, should be outlined in the RfP, with sample draft versions attached to the end in order to allow Bidders to submit mark-ups that will be examined by a legal representative of the Government Entity, and utilised as the basis for signing agreements.