Railway Reform: Toolkit for Improving Rail Sector Performance - ppiaf

Railway Reform: Toolkit for Improving Rail Sector Performance
Annex 4: Concession Contract Guide
Expiry of term
On Expiry of Term, the Concessionaire should surrender the concession, release
control of the Concessioned Assets to the Authority, and at the option of the
Authority, sell to the Authority other of the Concessionaire’s assets.
2.25 Hand Back
There are various methods of effecting Hand Back; some of these reflect the nature
of the concession granted, such as whether ownership transfer occurs at the
end of the Term or when Concessioned Assets are created. Hand Back is greatly
influenced by host country insolvency law and whether, if the Concessionaire
were to be insolvent, the assets can be retained or obtained to carry on meeting
the public service obligation, if such obligation exists. Whatever the legal mechanism
adopted, it is suggested that within a stated period or other time period
agreed by the parties, of the inspection carried out under section 2.20, the parties
should meet and agree on the processes based upon the Hand Back Procedure.
The headings for these items should appear as a schedule to the Agreement, and
might comprise the following.
• Works to be carried out to ensure that Concessioned Assets comply with requirements
on the Hand Back Date;
• Subsisting contracts and whether they are to be cancelled or assigned to the
Authority;
• Inventory of items included in the scope of Hand Back Assets;
• All the Concessionaire’s assets and details on whether such assets are to be
removed or transferred to the Authority, and the terms of such transfer in accordance
with the respective terms and conditions of terminations under the
Agreement;
• Employment, transfer or redundancy of employees;
• Training and testing procedures for personnel designated by the Authority to
ensure the independent operation of the Concessioned Assets by the Authority;
• Concessionaire’s rights and obligations that expressly survive termination or
expiration of the Term;
• Any other details and procedures in respect of the scope of Hand Back.
Scope of hand back
On the Hand Back Date, in accordance with the Hand Back Procedure, the Concessionaire
should release or transfer to the Authority the following:
• All of the Concessionaire’s rights, title and interest in the Hand Back Assets,
free and clear of encumbrances and claims of whatever kind or nature;
• All Concessionaire rights to use, possess, or access Concessioned Assets;
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