Railway Reform: Toolkit for Improving Rail Sector Performance - ppiaf

Railway Reform: Toolkit for Improving Rail Sector Performance
Annex 4: Concession Contract Guide
tion are carried out in accordance with quality control procedures. If so, the
Independent Engineer should have been appointed;
• Relevant insurances should have been obtained such as contractors’ all-risk,
property insurance, employer’s liability insurance and, from a state perspective—the
more important, third-party liability coverage;
• Conditions precedent to first draw down under the funding agreements
should have been met, other than that requiring the commencement of the
Term;
• If a direct agreement between the Funders and the Authority is required to
allow time for the Funders to arrange new management of the existing Concessionaire
or a replacement Concessionaire, or both (satisfactory to the
Authority), then that agreement should have been executed;
• Any capital payment to be made by the Concessionaire as a concession fee or
similar should have been paid, or in the case of installments, the first installment
should have been paid;
• Approval of the safety regime (possibly through a safety case) should have
been obtained from the Railway Safety Board; this may require separate
clearances for the infrastructure operation and rolling stock operation;
• Employees should be ready to transfer from the state to the Concessionaire;
• Third-party access terms should have been agreed with the Transport Regulatory
Commission, as should pricing under the charging regime—or in accordance
with whatever regime applies in the host country;
• Where the Transport Regulatory Commission or other authority has approval
of tariffs for freight charges, approval should have been obtained; and
• A renewals and maintenance regime for the first Specified Period, perhaps
five years, has been agreed with the relevant body or bodies.
A cut-off period for achieving these conditions should be provided for and the
consequences of not achieving them should be set out.
2.6 Term
The Agreement must specify the length of the Term or its duration. The duration
should reflect all relevant matters; see below.
The Authority will wish to specify a duration that is expected to result in the best
value-for-money solution for the reform. Factors to be taken into account when
deciding on the duration of the Agreement will include the following:
• Any service requirements imposed by the Authority under the Agreement;
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