Railway Reform: Toolkit for Improving Rail Sector Performance - ppiaf

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Railway Reform: Toolkit for Improving Rail Sector Performance Annex 5: Passenger Service Contract Guide Railway Assets. Those rights should terminate with expiry or earlier termination of the TSC. If the Contractor has developed or acquired software in connection with delivery of Transport Services, the PTA may require licenses to use processes in respect of those operational systems. If this is proprietary software, then following expiry or earlier termination of the TSC, those processes may be required until a new contractor is appointed and has had an opportunity to introduce its own systems. 2.30 Payments Provision should be made for payments and timing of payments such as when they would otherwise be due on a public or banking holiday. A failure to make payment by the due date should result in compensation. The Contractor will be borrowing working capital; any interest payable should represent the Contractor’s costs for late payments. However, the rate of compensation should not be such that it would provide an incentive for the Contractor to delay paying the PTA because it is a cheaper alternative than borrowing, e.g., at overdraft rates. Thus interest rates for late payments should be linked to the fluctuating cost of funds. 2.31 Proper Law and Language In most Host Countries it is accepted that the law controlling the Agreement will be the law of the host country. As to the language, the costs of international bidders and their Funders will be substantially reduced if translations are not required; therefore English, French or Spanish have advantages; typically, English is the most universal. However there may be political or cultural reasons that this is unacceptable. 2.32 Dispute Resolution In effect, there are three main methods of resolving disputes, expert determination, arbitration, and litigation; their use depends upon the law of the host country. In some jurisdictions, no mechanism exists to recognize an expert determination as final, binding, and enforceable. In other jurisdictions, courts will intervene in arbitration, or when an award for enforcement is to be registered, courts will accept a rehearing of issues. Reasons to avoid using the courts to settle disputes include the caliber of the judiciary, corruption within the court system, delays in processes and hearings, and the risk of multiple appeals. International bidders’ views on dispute resolution will depend on whether the host country is a signatory to the New York Convention on the Enforcement of Foreign Arbitral Awards, or other regional conventions. As a condition precedent to launching proceedings, it may be helpful to require that the PTA’s senior administrator and the Contractor’s chief executive officer meet and be allowed a short time to attempt to resolve the issue. This requirement ensures that senior management understands the issues and the point of The World Bank Page 304
Railway Reform: Toolkit for Improving Rail Sector Performance Annex 5: Passenger Service Contract Guide view of their counterparts before embarking on an expensive dispute. The corollary is that during the pre-reform process, PTA training should help administrators recognize that they must take decisions, not hide behind the pretext that decisions were forced upon the PTA by a Disputes Resolution Procedure finding. 2.33 Boilerplate The TSC will require several standard Service Periods addressing issues such as the service of notices, whether the TSC represents the entire agreement between the parties, or if there are a series of contracts, and a provision to preserve the TSC if any provision is found to be illegal, and so forth. The World Bank Page 305
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Railway Reform: Toolkit for Improving Rail Sector Performance - ppiaf

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