Sisal Annual Report 2011 - Permira

The Court therefore wished to clarify whether the delay in activating thenetwork, possibly resulting in loss of Treasury revenues, was the fault of theconcessionaires or other parties. Significantly, it ordered Sogei to be summoned.Sogei is the company which designed, implemented and operatedthe whole system for the management and control of the machines onbehalf of AAMS. As regards the calculation of lost Treasury revenues, theCourt ruled that the criteria proposed by the Prosecutor (namely the criteriaspecified in the agreement for quantifying penalties) could not be taken intoconsideration, postponed the calculation, and stated that in this respect, itwould take into consideration the findings of the Technical Commission(known as the Monorchio Commission) and the opinion of the Council ofState, the main aspects of which are described below.The second case of breach of the agreement involves failure to comply withthe service level established in the agreement, relating to the response ofthe gateway system to interrogations by Sogei’s central system. In this respect,AAMS initially imposed a penalty of EUR 1 billion on the concessionairesubsidiary, but the Regional Administrative Tribunal revoked the saidpenalty. Subsequently, AAMS appointed a Technical Commission, withinthe terms of the agreement, which should have established in advance thecriteria for recording and calculating breaches of contract and penalties;the Commission not only clarified and established the technical criteria forcalculating and recording data but in its final report, partly based on agendasapproved by Parliament, introduced the concept of setting a ceiling onpenalties, to safeguard the principles of proportionality, reasonableness andbalance of the contract. It suggested that the limit should be set at 10%of the net amount of the agreement, calculated (including all the legal relationshipsassociated with the management of the concession) at 0.3% ofthe receipts.AAMS, having acknowledged this report, also asked the Council of State,by way of consultation, for its opinion on the system of penalties laid downin the concession agreement. The said opinion confirmed the need to establisha maximum limit on such penalties, suggested as being 11% of theconcessionaire’s remuneration, leaving it up to AAMS to establish this lastparameter, but suggesting that it should be between 0.25% and 1.2%of the takings. AAMS then suggested that concessionaires should sign asupplemental deed to the agreement establishing the maximum ceiling ofpenalties as 11% of their remuneration, indicated as 3% of the takings,and the concessionaires signed this rider at the end of October 2010, specifyingthat the fact that they had signed did not mean that they admittedbreach of contract, and that “remuneration” was defined as the net sumeffectively remaining in the hands of the concessionaire and calculated inaccordance with the principles of fairness and reasonableness indicated bythe Council of State.28 Sisal ANNUAL REPORT 2011