Railway Reform: Toolkit for Improving Rail Sector Performance - ppiaf

Railway Reform: Toolkit for Improving Rail Sector Performance
Annex 4: Concession Contract Guide
The Independent Engineer and the Authority should be given access to the place
of manufacture and the site of the New Upgrades; the Concessionaire should be
required to ensure that contracts with its contractors and between its contractors
and their sub-contractors allow for this.
For larger-scale New Upgrades, the Authority may wish to review the Design/
Construction/ EPC Contract. The aim of this review is to avoid problems that
might otherwise arise in case of mismatch between Agreement provisions and
Concessionaire procurement, not an opportunity for the Authority to interfere in
the relationships between the Concessionaire and its contractors. Normally, if
there is project finance, Funders prefer works to be carried out under a unified
‘design-build’ contract to avoid the risk of a dispute between separately engaged
designers and construction contractors because otherwise this would leave a residual
construction liability with the Concessionaire.
If there is third-party access over existing infrastructure, the Agreement should
include a mechanism to deal with Track Access Holders’ rights, if possessing portions
of the track is required during construction or commissioning or both. Initially,
freight traffic is unlikely to be as time sensitive as passenger traffic, however,
as rail use is promoted, supply chain arrangement for just-in-time collection
and delivery may be developed. The regime should differentiate between scheduled
possessions and over-runs. Sometimes it is more efficient to allow longerterm
possessions of all the tracks in a relevant area (blockades).
2.10 Role and Obligations of the Authority
Usually, prior to signing the Agreement, the role of the Authority includes the
following:
• Defining output requirements and any constraints within which the output
requirements must be achieved;
• Reviewing and evaluating Concessionaire proposals to achieve outputs in
terms of approach, methods, resources, timetable, management, and organization,
including maintenance and operational procedures; and
• Negotiating and agreeing on all contractual terms with the Concessionaire.
In accordance to these principles, the Authority should not confirm with the Concessionaire
that its proposals will meet the service requirement. In practice, however,
the Authority should be confident before signing the Agreement that once
fully developed and implemented, Concessionaire proposals can deliver the service.
The Authority’s role after contract signature and prior to the Term commencing
may include the following.
• Appointing the Independent Engineer;
• Obtaining any necessary Change in Land Use Consents;
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