Railway Reform: Toolkit for Improving Rail Sector Performance - ppiaf

Railway Reform: Toolkit for Improving Rail Sector Performance
Annex 4: Concession Contract Guide
• Disclosure is to an infrastructure provider or operator for infrastructure
forming part of the system in respect of which Access forms a part.
A particular issue arises where the Concessionaire operates the Below Rail Infrastructure
and is a Rail Freight Operator. If Concessionaire employees transfer
from infrastructure operations to freight operations, it is important to ensure that
they do not use the Confidential Information obtained about Track Access Holders
and Track Access Applicants in their new position, and that the Concessionaire
gives specific undertakings in that respect.
2.22 Employees
If real reform of the railways is to be achieved then this is likely to require a comprehensive
change to the terms and conditions on which railway employees are
employed and the manner in which they carry out their duties including the removal
of restrictive practices. If existing personnel are to be transferred to the
Concessionaire, one option is for the Concessionaire to stipulate the number of
transferred personnel in its bid documents, and under the Agreement the Concessionaire
agrees to employ that number. Before the commencement of the
Term, the Concessionaire should select and identify employees to the Authority.
It would be reasonable to include a provision to encourage the Concessionaire to
use local personnel and to require that selection of local staff should give preference
to existing rail employees, subject to suitability, qualifications, and availability.
If the Concessionaire demonstrates that existing rail employees are unsuitable
or insufficiently qualified, then the Concessionaire should be free to recruit
employees with specific skills from other sources.
Each transferring employee would enter into an employment contract with the
Concessionaire. Issues such as accrued pension rights and other employee benefits
will need to be addressed; the extent to which it would be economically sensible
or feasible to maintain conditions that are at least equal to the terms and conditions
enjoyed with the former rail employer prior to the commencement of the
Term will depend upon what those terms were.
The Authority may require the Concessionaire to employ or procure the employment
of competent local labor, to the extent available, to construct the New Upgrades
and to operate, renew, and maintain the Concessioned Assets.
2.23 Reporting and Records
If the Authority grants a subordinated loan, any subordinated loan documentation
will entitle the Authority to receive comprehensive financial and management
information but that entitlement will end when the debt is discharged.
Thus it is suggested that the Authority should set out its rights to information in
the Agreement. Where the Authority is to repay loans to Funders, no matter the
grounds for termination, the Authority is likely to require more information to
enable it to monitor its exposure. Further, where the Authority or the state makes
temporary funds available due to disturbance in the lending market, the Authority
may require a greater influence over the choice of management in the event
that the concession gets into difficulty.
The World Bank Page 273