Railway Reform: Toolkit for Improving Rail Sector Performance - ppiaf

Railway Reform: Toolkit for Improving Rail Sector Performance
Annex 4: Concession Contract Guide
for the purposes of the application, it will be designated as a Track Access Applicant.
Transport Regulatory Commission is the term used for convenience in the
Guide; it is the legal entity responsible for either or both economic and quality of
service regulation on the railways. The exact nature of the entity will depend
upon host country law; if no person or entity is legally responsible for such regulation,
it would become contractually regulated under the Agreement until regulation
was introduced through legislation.
Variations means a change requested by the Concessionaire or by the Authority
regarding the Concessioned Assets or the services to be delivered under the
Agreement that differ from those planned or executed as New Upgrades or Future
Upgrades.
2.4 Conditions Precedent to the Effective Date
Most Agreement provisions will not come into effect until specified key requirements
have been met; this provision specifies the key requirements (Conditions
Precedent).
Some key requirements are more technical, such as each party obtaining all necessary
authorizations to be bound by the Agreement, and legal opinions that the
authorizations have been properly obtained.
Other key requirements are more substantial, such as the Concessionaire executing
binding funding agreements with funders.
If the Concessionaire is to procure the issue of a performance bond or similar, the
timing for its issue should be dealt with under conditions precedent, although the
provisions for obtaining bonds may be set out elsewhere (see Bonds post).
Provision will be required for a cut-off date to achieve the conditions, or receive a
waiver if feasible and for the consequences of failure by either party. In the case
of Concessionaire failure, if the tender documents have so provided, it might be
appropriate for the Authority to call the bid bond.
2.5 Conditions Precedent to the Start of the Term
On the assumption that the operational phase and the construction phase for
New Upgrades will start on commencement of the Term, specific steps must be
achieved in order for the Concessionaire to start undertaking its obligations.
• The Concessionaire may require a license to operate; separate licenses may
be required for infrastructure operation and train operation;
• Where New Upgrades require a change in Land Use and this is to be obtained
by the Authority, it should have been obtained;
• Where New Upgrades are substantial, it may be prudent to appoint a third
party (the Independent Engineer) to ascertain that the design and construc-
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