AN ACT
to provide for the participation of the
private sector in the financing,
construction, development, operation, or
maintenance of infrastructure or
development Projects or other related
services of the Government through Concession Contracts in Public Private
Partnership mode and the establishment of institutions to regulate, monitor and
supervise the implementation of Public Private Partnership contracts.
WHEREAS it is expedient to establish a
favorable legislative framework to promote
and facilitate the
implementation of privately financed infrastructure Projects in
form of Public Private Partnership by
enhancing transparency, fairness and long-term sustainability and removing
undesirable restrictions on private sector participation in shape of
partnership with public sector in infrastructure development and operation;
AND WHEREAS it is also deemed necessary
to further develop the general principles of transparency, economy and fairness
in the award of contracts in public-private partnership through the
establishment of related institutions
and specific procedures
to award such
contracts, and to regulate, monitor and supervise such
Projects and to provide for the matters ancillary there to and connected
therewith;
It is hereby
enacted as follows:
CHAPTER I PRELIMINARY
1. Short
title, extent and commencement.---(1) This Act may be called the Khyber
Pakhtunkhwa Public Private Partnership Act, 2014.
(2)
It extends to
the whole of
the Province of the
Khyber Pakhtunkhwa.
(3)
It shall come into force at once.
2. Definition.---
In this Act, unless the context otherwise requires,-
(a)
―Bidder‖ or ―bidders‖ means a person, including groups
of persons or company as defined in the Khyber Pakhtunkhwa Factory Act, 2013
(Khyber Pakhtunkhwa Act No. XVI of 2013) thereof, that participate in selection
proceedings concerning an infrastructure Project or development
programe;
(b)
―Committee‖
means the Public
Private Partnership Committee
established under section 3 of this Act;
(c)
―Contracting
Authority‖ means a
department, attached department, a
body corporate, autonomous body
of the Government, local
government, or any organization or corporation owned or controlled by the Government
or local government;
(d)
―Concessionaire‖ includes a private party or person
that carries out an infrastructure Project
under a Concession Contract
entered into with a Contracting
Authority;
(e)
―Concession
Contract‖ means the
mutually binding public-private
partnership agreement or agreements between
the Contracting Authority and
the Concessionaire that set forth the terms and conditions for the
implementation of an infrastructure Project in the form of Build Operate Transfer
(BOT), Build Own Operate Transfer
(BOOT), Design Build
Finance Operate (DBFO) or any other variant of Public Private
Partnership;
(f)
―development Project‖ means a program, activity or a
scheme, meant to ensure, improve or consolidate service delivery in any social
or development sector, whether or not reflected in the annual development
program of the Province and shall include
interventions such as research, modernization of processes,
addressing lags in service delivery or improvements in
the general standards of living
in the sectors listed in the Schedule;
(g)
―feasibility study" means a study undertaken to
explore the technical, financial, legal, social, environmental and gender
mainstreaming feasibility
of undertaking an infrastructure or development facility as
a Public Private Partnership;
(h)
―Government‖
means the Government of the
Khyber Pakhtunkhwa;
(i)
―Infrastructure
facility‖ means physical
facilities and systems that directly or indirectly provide services to the
general public;
(j)
―Infrastructure Project‖ means the design,
construction, development and operation of new infrastructure facilities or
the rehabilitation, modernization, expansion, maintenance or
operation of existing infrastructure facilities;
(k)
―Lender" means a financial institution, bank, or
establishment providing financial support with or without security;
(l)
"Person" means a company, a n entity, a firm,
a n association, a body
of individuals, or
a sole proprietor other than a
Contracting Authority;
(m)
―PPP Node‖ means
the Public Private
Partnership Node, established under section 7 of this Act;
(n)
"PPP Unit" means the Public Private
Partnerships Unit established under section 5 of this Act;
(o)
―Project‖ includes
the developmental Project
or the infrastructure Project, as
the case may be;
(p)
―Public
Private Partnership‖ means
an arrangement between a
Contracting Authority and a Concessionaire under which the Concessionaire-
(i)
undertakes
to perform a
public function or provide a service on behalf of the
Contracting Authority;
(ii)
receives a benefit
for performing a
public function by way of-
(a)
compensation from a public fund, if so permitted by the
relevant law;
(b)
charges or user
fees collected by the
Concessionaire from users or consumers of a service provided to them; or
(c)
a combination of such compensation and such charges or
fees; and
(iii) is generally liable for risks arising from
the performance of the function in accordance with the terms of the Concession
Contract;
(q)
―Public Procurement
Rules‖ means the
Khyber Pakhtunkhwa Public Procurement Rules, as may be framed by the
Government from time to time, in accordance with the
provisions of the
Khyber Pakhtunkhwa Public Procurement Regulatory Authority
Act, 2012;
(r)
―Regulatory Agency‖ means a public authority that is
entrusted with the power to issue and enforce rules and regulations governing
the infrastructure facility or the
provision of the relevant services;
(s)
―Schedule‖ means Schedule appended to this Act;
(t)
―unsolicited
proposal‖ means any proposal
relating to the implementation of an infrastructure Project that is not
submitted in response to a request or solicitation
issued by the
Contracting Authority within the context of a selection procedure;
(u)
"user
fee" means the
rate, toll, fee,
or other charge imposed for the use of all or part of
an infrastructure or development facility or service; and
(v)
"value
for money" means
that the undertaking
of a public function of the
Contracting Authority by a Concessionaire
under a Public
Private Partnership results in a
net benefit accruing to that Contracting Authority defined in terms of cost,
price, quality, quantity, timeliness or risk transfer.
CHAPTER II
INSTITUTIONAL
ARRANGEMENTS
3. Establishment
of the Public Private Partnership Committee.---(1) As soon as may be
after the commencement of this Act, the Government shall establish a Committee
to be known as the Public Private Partnership Committee with a mandate to
promote, facilitate, coordinate and oversee private investment
in infrastructure or
development Projects using
the public-private partnership approach.
(2)
The Committee shall comprise of –
(i)
Minister
for Planning and Chairman Development Department
of the
Khyber
Pakhtunkhwa;
(ii)
Minister for
Finance Department Vice-Chairman of
the Khyber Pakhtunkhwa;
(iii)
Minister for Energy and Power of Member the Khyber Pakhtunkhwa;
(iv)
Chief Secretary to Government; Member
(v)
Additional Chief Secretary (Dev) Member to Government;
(vi)
Secretary Finance to Government; Member
(vii)
Secretary to
Government, of the Member concerned Department;
(viii)
five (5) members from the private Members
sector to
be nominated by the
Chairman, from amongst academia, chambers of commerce
and industry, financial institutions, community social organizations, consumers
groups, foreign donors, multilateral agencies one out of 5 members must be
women etc; and
|
(ix)
Secretary to Government, Planning and Development Department.
(x)
Secretary
to Government, Law
|
Member/ Secretary
Member
|
and
Parliamentary Affairs Department.
(3)
The Chairman of the Committee may co-opt such number of
Sectoral Experts, as he may deem fit.
(4)
The members mentioned at clause (viii) of sub-section
(2) shall be nominated for a
period of two
years and shall
be eligible for
re- nomination for two terms only. They shall be selected after careful
consideration of any actual or potential conflicts of interest. If any conflict
of interest arises during the tenure the
majority votes of the members of the public private committee partnership
committee of any member, the
Chairman, shall remove such person from the Committee and replace him with an
eligible person.
(5)
The meetings of the Committee shall be presided over by
the Chairman and in his absence by the Vice-Chairman.
(6)
The quorum of
the Committee shall
be nine members including Chairman.
(7)
The
decisions of the
Committee shall be
taken by the majority of its members present. In case
of a tie, the presiding member shall have the casting vote.
(8)
All orders, determinations, and decisions of the
Committee shall be rendered in writing and signed by the Secretary of the
Committee, subject to approval of Chairman or Vice Chairman, as the case may
be.
4. Functions
of the Committee.---(1) The functions of the Committee shall be to-
(a)
ensure that each draft Concession Contract is
consistent with the provisions of this Act;
(b)
formulate
policy guidelines on
Public Private Partnerships;
(c)
ensure that all Projects are consistent with the
provincial priorities specified in the relevant sector policy and strategies;
(d)
approve a Project
proposal submitted to
it by a Contracting Authority of any amount:
provided that no
further approval shall
be
required from
any other forum for the said project;
(e)
approve award of Concession Contracts and all other
supplemental Public Private Partnership agreements;
(f)
authorize allocations from the Fund establish under
this Act;
(g)
formulate
or approve standards, guidelines and procedures for
awarding Concession Contracts and standardized bid documents;
(h)
review the legal, institutional and regulatory
framework of Public Private Partnerships;
(i)
approve additions to the organizational structure of
the PPP Unit by giving solid reasons for
addition;
(j)
oversee the monitoring and evaluation by contracting
authorities, of a Public Private Partnership from the commencement to the post
completion stage;
(k)
ensure approval of, and fiscal accountability in the
management of, financial and any other form of support granted by
Government in the
implementation of Projects under
this Act;
(l)
ensure the efficient implementation of any Concession
Contract entered into by a Contracting Authority; and
(m)
perform such other functions as may be conferred on it
under this Act or under any other law for the time being in force.
(2)
The Committee shall have all the powers necessary for
the proper discharge of its functions under this Act and without prejudice to
the generality of the foregoing, shall have the power to-
(a)
oversee the implementation of policies formulated
under clause (b) of sub-section(1) of section 4;
(b)
require any information from any party to a
Project on any matter relating to a Public Private Partnership; and
(c)
take custody of a Concession Contract made under
this Act and monitor compliance with the terms and conditions of the Concession
Contract.
(3)
The Committee with
the prior approval
of Provincial Development Working
Party (PDWP) may
authorize utilization of an
amount from the fund established under the Khyber Pakhtunkhwa Hydel Development
Fund Ordinance, 2001(Ord. No. XXVI of 2001), for Energy and Power Development
Projects.
(4)
The Committee shall meet once in two months and may
meet earlier if so required. The Secretary of the Committee may take approval
of any decision through circulation from members of the Committee;
(5)
The Committee may establish such sub-committees as it
ma consider necessary for
the better performance
of its functions
and the exercise of its powers
under this Act.
(6)
The Committee may co-opt into the membership of a sub-
committee established under sub-section (5), such persons whose knowledge and
skills are found necessary for the performance of the functions of the
sub-committee.
(7)
The Committee may, by resolution either generally or in
any particular case, delegate to any sub-committee or to any member, officer,
employee or agent of the Committee, the exercise of any of the powers or the
performance of any of the functions of the Committee under this Act or under
any law.
5. Public
Private Partnerships Unit.--- (1) There shall be established a Unit to
be known as the Public Private Partnership Unit, under the chairmanship of the
Secretary to Government Planning and Development Department, with permanent
members not below the rank of Additional
Secretary,
nominated from the Finance Department and Law, Parliamentary Affairs and Human
Rights Department and such other co-opted members as the Committee deems
appropriate.
(2)
Committee shall be at liberty to add other members in
the composition of PPP Unit.
6. Functions
of the PPP Unit.---(1) The functions of the PPP Unit shall be to-
(a)
serve as the
secretariat and technical
arm of the Committee; and
(b)
provide technical, financial and legal expertise to the
Committee and any PPP Node established under this Act.
(2)
In the performance of its functions under sub-section
(1), the PPP Unit shall-
(a)
serve as a resource centre on matters relating to
Public Private Partnerships;
(b)
conduct civic education to promote the awareness
and understanding of the Public Private Partnerships process amongst
stakeholders;
(c)
provide capacity building to, and advise
contracting authorities or other parties involved in the planning,
coordinating, undertaking or monitoring of Projects under this Act;
(d)
rate,
compile and maintain
an inventory of
Public Private Partnership Projects that are highly rated and which are
likely to attract private sector investment;
(e)
develop an
open, transparent, efficient and
equitable process based on
principles of social justice, equity and maintenance of Ecological balance for ensure sustainability
through holistic approach for managing the identification, screening, prioritization, development,
procurement, implementation and monitoring of Projects, and ensure that the
process is applied consistently to all Projects;
(f)
conduct research and gap analysis to ensure
continuous performance improvement in the implementation of Public Private
Partnerships;
(g)
collate, analyze and disseminate information
including data on the liabilities of the Government in relation to a Project;
(h)
make recommendations on the approval or rejection
of a Project, prior to submission to the Committee for approval;
(i)
assist contracting authorities, where it
considers it necessary, to design, identify, select, prioritize, appraise,
evaluate and negotiate infrastructure and development Projects;
(j)
maintain a record of all Project documentation;
(k)
review and assess requests for Government support
in relation to a Project and advise the Committee on the support that should be
accorded in relation to a Project;
(l)
assist
the Committee in
formulating guidelines and standard documentation required under
this Act;
(m)
liaise and supervise the contracting authorities
in their roles in the various stages of a Project cycle;
(n)
ensure that the tendering process relating to a
Project conforms with this Act and to procurement best practices;
(o)
put in place measures to eliminate constraints
limiting the realization of
benefits expected from
a Public Private Partnership;
(p)
monitor
contingent liabilities and
accounting and budgetary issues
related to Public Private Partnerships
with the relevant offices
within the Department responsible for finance; and
(q)
carry out such other functions as may be
conferred on it by the Committee from time to time under this Act.
(3)
The PPP Unit shall prepare financial accounts and an
inventor of any monies allocated to any fund under this Act, any financial
support received by and any success fees received by it from a Concessionaire
as the case may be, under this Act.
7. Establishment
of a PPP Node.---(1) A Contracting Authority that intends to enter into
a Public Private Partnership arrangement in form of a Concession Contract with
a Concessionaire shall establish a Public Private Partnership Node.
(2)
A PPP Node established under sub-section (1) shall be
headed by the principal accounting officer of the Contracting Authority and
shall consist of such other financial, technical, procurement and legal
personnel as that authority shall, in consultation with the unit, consider
necessary for the performance of its functions in relation to a Project under
this Act.
(3)
A PPP Node shall, on behalf of the Contracting
Authority –
(a)
identify,
screen and prioritize
Projects based on guidelines issued by the Committee;
(b)
prepare
and appraise each
Concession Contract to ensure its legal,
regulatory, social, economic
and commercial viability;
(c)
ensure that the parties to a Concession Contract
comply with the provisions of this Act;
(d)
undertake the tendering process in accordance
with this Act;
(e)
monitor the implementation of a Concession
Contract entered into with the contacting authority;
(f)
liaise with all key stakeholders during a Project
cycle;
(g)
oversee
the management of
a infrastructure or development Project in accordance with
the Concession Contract entered into by the Contracting Authority;
(h)
submit to the
PPP unit, annual or such other
period reports on Concession Contracts altered into by the Contracting
Authority relating to a Project under this Act;
(i)
maintain a record of all documentation and
Concession Contract entered into by the Contracting Authority relating to
an infrastructure or
development Project under this
Act;
(j)
prepare
Projects in accordance
with guidelines and standard documents issued by the
Committee under this Act;
(k)
ensure that the transfer of assets at the expiry
or earl termination of a Concession Contract is, consistent with the terms and
conditions of the Concession Contract, where the Concession Contract involves a
transfer of assets; and
(l)
carry out such other functions as may be assigned
to it by the Contracting Authority.
(4)
In performing its functions under sub-section (1), a
PPP Node shall report to the PPP Unit and shall-
(a)
implement the recommendations and guidelines issued by
the PPP Unit; and
(b)
submit such information as shall be required by the PPP
Unit or the Committee.
CHAPTER III PRIVATE
PARTICIPATION IN PUBLIC INFRASTRUCTURE
8. Private
sector participation.---(1) Notwithstanding anything to the contrary in
any other law for the time being in force, Government, its contracting
authorities and local bodies will be authorized to seek participation from the
private sector in appropriate Projects, subject to the provisions of this Act.
(2)
Subject to the provisions and the procedures outlined
in this Act, Government and its contracting authorities shall be fully
empowered to enter into Concession
Contract and arrangements
with Concessionaires under
mutually agreed terms and conditions in one or several Project planning and
management functions such as designing, financing, building, constructing,
owning, operating and maintaining different infrastructure Projects or
development programs.
(3)
Government
and its contracting authorities with
the approval of the Committee may enter Concession Contract to vest
public property in Concessionaire for development and other appropriate
purposes. The relevant contracting authorities may transfer title in Public
Properties to Concessionaire on appropriate terms and conditions as the
Committee may deem fit.
(4)
Government and its contracting authorities subject to
the general or special approval of the Committee, shall be competent to pay any
fees for services performed by private parties under duly authorized Concession
Contracts including but not restricted to user fees, subsidies, revenue
shortfall guarantees and may appropriate monies for such purposes.
9. Applicability.---(1)
Subject to the provisions contained hereinafter and the overall control of the
Committee, Concession Contracts in nature of Public Private Partnership may be
entered into by the relevant contracting authorities only in respect of the
sectors listed in Schedule.
(2)
Government may, by notification, amend Schedule and
appl the provisions of this Act to an infrastructure development Project or of
any sector, not enumerated in the Schedule.
10.
Basis for Public Private Partnership.---(1)
The Committee, with the assistance of the PPP Unit, shall devise sector
specific methodologies, establishing the general criterion for selection of
infrastructure Projects for Concessionaire contracts.
(2)
Each of such sector specific methodologies shall
require a preliminary needs assessment, conducted by the relevant Contracting
Authority, which shall among other things, states the economic, financial,
legal and administrative grounds
of the decision
to launch an
award procedure for such a Concession Contract.
(3)
This assessment shall include a comparative analysis of
the various options, particularly in terms of best value for money, sharing of
risks and performance, as well
as sustainable development
issues, if in response to an unforeseeable situation,
this assessment may be succinct.
(4)
Concessions Contracts may only be signed in situations
where the preliminary needs assessment conclusively shows that:
(a)
given
the degree of
complexity of the infrastructure Project, the Contracting
Authority is not objectively in a position to define unaided and in advance the
technical means to meet its needs or to make the financial or legal
arrangements for the Project; or
(b)
the
infrastructure Project is
a matter of
urgency, involving making up
for a delay,
detrimental to the general
interest, affecting the completion of public facilities or the performance of a
public service mission, irrespective of the causes of the delay, or responding
to an unforeseeable situation; or
(c)
given the Project characteristics, the
requirements of the public service for which the Contracting Authority is
responsible, or the
inadequacies and difficulties observed in carrying out
comparable Projects, resorting to such a contract presents a more favorable
balance of advantages versus disadvantages
compared to other kinds of public procurement
contracts. The criterion of
deferred payment shall
not alone constitute
an advantage.
11.
Project
identification and preparation.---(1) Subject
to the provisions of section 10
of this Act, any Contracting Authority may identify and prepare any
infrastructure or development Project for its implementation through Public
Private Partnership and shall submit an advance report to this effect, to the
Committee.
(2)
The Contracting Authority, with the assistance of its
relevant PPP Node, shall identify and conceptualize potential Projects from its
master plans and other planning documents.
(3)
The Contracting Authority shall prioritize the Projects
within its sector or geographical area, using criteria such as supply and
demand gaps, social and economic benefits, focusing
on Gender equity, financial attractiveness, risks and uncertainties
involved, and readiness for implementation having
Gender equity and sustainability as cross cutting thems.
(4)
Preparation
of a high-priority
Project shall consist
of a feasibility study, initial
environmental examination or environmental impact assessment, risk analysis, analysis of
the need for
Government support, stakeholder consultations, determination of the PPP
Node, and preparation of bid documents including a draft PPP Concession
Contract.
(5)
The
Contracting Authority shall
submit a viable
Project proposal through the PPP Unit to the Committee.
12.
Project
prioritization and approval.---(1) The
PPP Unit shall exercise quality control by reviewing
the viability of a Project proposal and its completeness in terms of
documentation.
(2)
The PPP Unit shall prioritize the Projects across sectors
and the Province that pass the criteria, by taking into account provincial
development objectives, and submit them to the Committee for approval.
(3)
The PPP Unit shall include approved Projects in a
priority list of the Province and widely publicize them.
13.
Approval of Government support.– (1) When
a proposal for Public Private
Partnership has been
finalized, the Contracting
Authority shall, submit the
proposal to the PPP Unit under intimation to the Committee. The proposal amongst
other particulars shall
include any requests
for Government support which are integral to the Project proposal.
(2)
The PPP Unit, shall review the justification and
eligibility of the infrastructure or the development Project for public-private
partnership, and analyze the fiscal impact of the related direct and contingent
liabilities.
(3)
The PPP Unit shall, on the basis of review and
analysis, make a recommendation to the Committee for approval, rejection or
reconsideration of the requested Government support.
(4)
If approved by the Committee, the Finance Department
shall make the necessary arrangements for including such support in the annual
budget of the Province.
14.
Consideration by the Committee.– (1) The
Committee shall, by taking into account the recommendations of the PPP Unit,
consider a Project proposal submitted by a Contracting Authority and may
approve the proposal with or without modification, reject it or return it to
the Contracting Authority for reconsideration.
(2)
In case a Project proposal is returned for
reconsideration, the Contracting Authority shall take suitable action on the
decision taken by the Committee and may resubmit the proposal for approval by
the Committee.
CHAPTER - IV
SELECTION
OF THE CONCESSIONAIRE
15.
Rules
governing the selection
proceedings.---Subject to overall supervision and control of the
Committee, once a Project is approved in terms of preceding Chapter, the
selection of the Concessionaire shall be conducted in accordance with section
26 to 47 of this Act and, for matters not provided herein, in accordance
with the Khyber Pakhtunkhwa Public
Procurement Rules.
16.
Purpose and procedure of pre-selection.---(1)
The Contracting Authority, with the approval of the Committee, shall engage in
pre-selection proceedings with a view to identifying bidders that are suitably
qualified to implement the envisaged infrastructure Project.
(2)
The invitation to participate in the pre-selection
proceedings shall be published in accordance with the Khyber Pakhtunkhwa Public
Procurement Rules.
(3)
To the extent
not already required
by the Khyber Pakhtunkhwa Public Procurement Rules,
the invitation to participate in the pre-selection proceedings shall include at
least the following:
(a)
a
description of the
infrastructure facility or
development program;
(b)
an indication of other essential elements of the
Project, such as the services
to be delivered
by the Concessionaire, the financial
arrangements envisaged by the
Contracting Authority, for example, whether the Project will
be entirely financed
by user fees
or tariffs or whether
public funds such
as direct payments, loans or
guarantees may be provided to the Concessionaire;
(c)
where already known, a summary of the main
required terms of the Concession Contract to be entered into;
(d)
the
manner and place
for the submission
of applications for pre- selection and
the deadline for the submission, expressed as a specific
date and time, allowing sufficient time
for bidders to
prepare and submit their
applications;
(e)
the
manner and place
for solicitation of
the pre- selection documents; and
(f)
the share of debt equity to be specified in
publication.
(4)
To the extent
not already required
by t h e Khyber Pakhtunkhwa Public Procurement
Rules, the pre- selection documents shall include at least the following
information:
(a)
the
pre-selection criteria in accordance with section 1 7 of this Act;
(b)
whether the Contracting Authority intends to
waive the limitations on the participation of consortia set forth in section 1
8 of this Act;
(c)
whether the Contracting Authority intends to
request only a limited
number of pre-selected
bidders to submit proposals upon
completion of the pre-selection proceedings in accordance with sub-section (2)
of section 19 of this Act, and, if applicable, the manner in which this
selection will be carried out; and
(d)
whether the Contracting Authority intends to
require the successful bidder to establish an independent legal entity established and
incorporated under the C o mp a n y laws
of Pakistan in
accordance with section 30 of
this Act.
(5)
For
matters not provided
for in this section, the
pre- selection proceedings shall be
conducted in accordance with the Khyber Pakhtunkhwa Public Procurement
Rules.
17.
Pre-selection criteria.—In order to
qualify for the selection proceedings, interested bidders must meet objectively
justifiable criteria that the
Contracting Authority in light of recommendations of the PPP Unit considers
appropriate in the particular proceedings, as stated in the pre- selection
documents. These criteria shall include at least the following:
(a)
adequate
professional and technical
qualifications, human resources, equipment and other physical facilities
as necessary to carry out all the phases of the Project, including design,
construction, operation and maintenance;
(b)
sufficient ability to manage the financial aspects of
the Project and capability to
sustain its financing requirements; and
(c)
appropriate managerial and organizational capability,
reliability and experience, including previous experience in operating similar
infrastructure facilities.
18.
Participation
of consortia.—(1) The
contracting authority, when first
inviting the participation of bidders in the selection
proceedings, shall allow them to form bidding consortia. The information
required from members of bidding consortia to demonstrate their qualifications
in accordance with section 17 of this Act, shall relate to the consortium as a
whole as well as to its individual participants.
(2)
Unless otherwise authorized by the Committee and stated
in the pre-selection documents, each member of a consortium may participate,
either directly or indirectly, in only one consortium, at the same time. A
violation of this rule shall cause the disqualification of the consortium and
of the individual members.
(3)
When considering the qualifications of bidding
consortia, the Contracting Authority shall consider the capabilities of each of
the consortium members and assess whether the combined qualifications of the
consortium members are adequate to meet the needs of all phases of the Project.
19.
Decision on
pre-selection.—(1) T he Contracting Authority shall make a
decision with respect to the qualifications
of each bidder
that has submitted an
application for pre- selection. In reaching that decision,
the Contracting Authority shall apply only the criteria that are set forth in
the pre-selection documents. All pre-selected bidders shall thereafter be
invited by the Contracting
Authority to submit
proposals in accordance
with sections 20 to 27 of this Act.
(2)
Notwithstanding anything contained in
sub-section(1), the
contracting authority may,
provided that it
has made an
appropriate statement in the pre-selection documents to that effect,
reserve the right to request proposals upon completion of the pre- selection
proceedings only from a short-listed
bidders that best
meet the pre-selection
criteria.
P r o v i d e d t h a t
t h e r e a r e a t l
e a s t 3 s h o r t
l i s t e d b i d d e r s ; For this purpose, the Contracting
Authority shall rate the bidders that
meet the pre-selection criteria
on the basis
of the criteria applied to assess their
qualifications and draw up the list of bidders that will be invited to submit
proposals upon completion of the pre-selection proceedings. In drawing up
the list, the
Contracting Authority shall apply
only the manner of
rating for short-listing that
is set forth
in the pre-selection documents.
20.
Single-stage and two-stage procedures for
requesting proposals.— (1) The contracting
authority shall provide
a set of the
request for proposals and related
documents issued in accordance with section 21 of this Act, to each
pre-selected bidder that pays the price, if any, charged for those documents.
(2)
Notwithstanding the above, the Contracting Authority
may use a two- stage procedure to request proposals from pre-selected bidders
when the Contracting Authority does not deem it to be feasible to describe in
the request for proposals the characteristics of the Project such as Project
specifications, performance indicators, financial arrangements or contractual
terms in
a manner sufficiently
detailed and precise
to permit final proposals to be formulated.
(3)
Where a two-stage procedure is used, the following
provisions shall apply:
(a)
the initial request
for proposals shall call
upon the bidders to submit, in
the first stage of the procedure, initial proposals relating to Project
specifications, performance indicators, financing
requirements or other
characteristics of the Project as well as to the main contractual terms
proposed by the Contracting Authority;
(b)
the Contracting Authority may convene meetings and
hold discussions with any
of the bidders
to clarify questions concerning
the initial request for proposals or the
initial proposals and accompanying documents submitted by the bidders. The
Contracting Authority shall prepare
minutes of any
such meeting or discussion containing the questions
raised and the clarifications provided by the Contracting Authority;
(c)
following examination of the proposals received, the
Contracting Authority may review and, as appropriate, revise the initial
request for proposals by deleting or modifying any aspect of the initial
Project specifications, performance indicators, financing requirements or other
characteristics of the Project, including the main contractual terms, and any
criterion for evaluating and comparing proposals and for ascertaining the
successful bidder, as set forth in the
initial request for proposals, as well as by adding characteristics or criteria
to it. The Contracting Authority shall indicate in the record of the selection
proceedings to be kept pursuant to section 36 of this Act, the justification
for any revision to the request for proposals. Any such deletion, modification
or addition shall be communicated
in the invitation
to submit final proposals; and
(d)
in the second stage of the proceedings, the Contracting
Authority shall invite the
bidders to submit
final proposals with respect to a single set of Project specifications,
performance indicators or contractual terms in accordance with section 21 to 27
of this Act.
21.
Content of the request for proposals.— To
the extent not already required by the Khyber Pakhtunkhwa Public Procurement
Rules, the request for proposals shall include at least the following
information:
(a)
general information as may be required by the bidders
in order to prepare and submit their proposals;
(b)
Project specifications and performance indicators, as
appropriate, including the contracting authority’s requirements regarding
safety and security standards and
environmental protection;
(c)
the contractual terms proposed by the Contracting
Authority, including an indication of which terms are deemed to be
non-negotiable; and
(d)
the criteria for evaluating proposals and the
thresholds, if any, set by the Contracting Authority in consultation with PPP
Unit for identifying non-responsive proposals; the relative weight to be
accorded to each evaluation criterion
and the manner
in which the
criteria and thresholds are to be
applied in the
evaluation and rejection of proposals.
22.
Bid securities.—(1) The
request for proposals
shall set forth
the requirements with respect to
the issuer and the nature, form, amount and other principal terms and
conditions of the required bid security.
(2)
A bidder shall not forfeit any bid security that it may
have been required to provide, other than in cases of:
(a)
withdrawal
or modification of
a proposal after
the deadline for submission of proposals and, if so stipulated in the request
for proposals, before that deadline;
(b)
failure to enter
into final negotiations with
the Contracting Authority pursuant to s u b - section (1) of section 27
of this Act;
(c)
failure to
submit its best and final offer within the time limit prescribed by the Contracting Authority pursuant to sub-section
(2) of section 27 of this Act;
(d)
failure to sign the Concession Contract, if required by
the Contracting Authority to do so, after the proposal has been accepted; and
(e)
failure to provide required security for the
fulfillment of the Concession Contract after the proposal has been accepted or
to comply with any other condition prior to signing the
Concession Contract specified
in the request for proposals.
23.
Clarifications
and modifications.— The
Contracting Authority may,
whether on its own initiative or as a result of a request for clarification by
a bidder, review and, as appropriate, revise any element of the request
for proposals as
set forth in
section 21 of
this Act. The
Contracting Authority shall indicate in the record of the selection
proceedings to be kept pursuant to section 36 of this Act, the justification
for any revision to the request for proposals. Any such deletion, modification
or addition shall be communicated to the bidders in the same manner as the
request for proposals at a reasonable time prior
to the deadline
for submission of proposals.
24.
Evaluation criteria.— (1) In addition to
Public Private Partnership policy and criteria laid down by the Committee, the
evaluation and comparison of the technical proposals, while generally insuring
value for money, shall include at least
the following:
(a)
technical soundness;
(b)
compliance with environmental standards;
(c)
operational feasibility; and
(d)
quality of services
and measures to
ensure their continuity.
(2)
The criteria for the evaluation and comparison of the
financial and commercial proposals shall include, as appropriate:
(a)
the present value of the proposed tolls, unit prices
and other charges over the Concession period;
(b)
the present value of the proposed direct payments by
the Contracting Authority, if any;
(c)
the costs for design and construction activities,
annual operation and maintenance costs, present value of capital costs and
operating and maintenance costs;
(d)
the extent of
financial support, if
any, expected from a Regulatory
Agency;
(e)
the
soundness of the
proposed financial arrangements;
(f)
the extent of acceptance of the negotiable contractual
terms proposed by the
Contracting Authority in the
request for proposals; and
(g)
the social and economic development potential offered
by the proposals.
25.
Comparison and evaluation of proposals.— (1) The Contracting
Authority shall compare and evaluate each
proposal in accordance with the evaluation criteria, the relative weight
accorded to each such criterion and the evaluation process set forth in the
request for proposals.
(2)
For the purposes of sub-section (1), the Contracting
Authority in consultation with PPP Unit, may establish thresholds o r q u a l i f y i n g s c o r e with respect to quality, technical, financial
and commercial aspects. Proposals that fail to achieve the thresholds shall be
regarded as non- responsive and rejected from the selection procedure.
26.
Further demonstration of fulfillment of
qualification criteria.— The
Contracting Authority may
require any bidder
that has been
pre- selected to demonstrate
again its qualifications in
accordance with the same criteria used for pre-selection. The
Contracting Authority shall disqualify any bidder that fails to
demonstrate again its
qualifications if requested to do so.
27.
Final negotiations.—(1) The Contracting
Authority shall rank all responsive proposals on the basis of the evaluation
criteria and invite for final negotiation of the Concession Contract the bidder
that has attained the best rating. Final negotiations shall not concern those
contractual terms, if any that were stated as non-negotiable in the final
request for proposals.
(2)
If it becomes apparent to the Contracting Authority
that the negotiations with the invited bidder will not result in a Concession
Contract, the Contracting Authority shall inform the bidder of its intention to
terminate the negotiations and give the bidder reasonable time to formulate its
best and final offer. If
the Contracting Authority
does not find
that proposal acceptable, it
shall terminate the negotiations with the bidder concerned. The Contracting
Authority shall then invite for negotiations the other bidders in the order of
their ranking until it arrives at a Concession Contract or rejects all
remaining proposals. The Contracting Authority shall not resume negotiations
with a bidder with which negotiations
have been terminated pursuant to this sub-section.
CHAPTER - V
NEGOTIATION OF
CONCESSION CONTRACTS WITHOUT COMPETITIVE PROCEDURES
28.
Circumstances authorizing award without
competitive procedures.— Subject to
approval by the
Committee, the Contracting Authority is authorized to
negotiate a Concession Contract without using the procedure set forth in
sections 16 to 27 of this Act, in the following cases:
(a)
when there is an urgent need for ensuring continuity in
the provision of the service and engaging in the procedures set forth in
sections 16 to 27 of this Act, would be impractical, provided that the
circumstances giving rise to the urgency were neither foreseeable by the
Contracting Authority nor the result of dilatory conduct on its part;
(b)
where the Project is of short duration and the
anticipated initial investment value does not exceed the amount of rupees five
hundred (500) millions;
(c)
where the Project
involves matters relating to
public peace and security or has to address disasters, calamities and other
emergencies of like nature;
(d)
where there is
only one source capable of
providing the required service, such as when the provision of the
service requires the use of intellectual property, trade secrets or other
exclusive rights owned or possessed by a certain person or persons;
(e)
in cases of unsolicited proposals falling under section
33 of this Act;
(f)
when an invitation to the pre-selection proceedings or
a request for proposals has
been issued but
no applications or proposals
were submitted or
all proposals failed to meet the evaluation criteria set forth in the
request for proposals and if, in the judgment of the Contracting Authority,
issuing a new invitation to the pre-selection proceedings and a new request for
proposals would be
unlikely to result
in a Project
award within
a required time frame; and
(g)
in other cases where the Committee authorizes such an
exception for compelling reasons of public interest.
29.
Procedures for negotiation of a Concession
Contract.— Where a Concession Contract is negotiated without using the
procedures set forth in sections 16 to 27 of this Act, the Contracting
Authority shall-
(a)
except for
Concession Contracts negotiated pursuant to clause (c) of section 28 of
this Act, cause a
notice of its intention
to commence negotiations in
respect of a Concession Contract to be published in accordance with the Khyber
Pakhtunkhwa Public Procurement
Rules;
(b)
engage in negotiations with as many persons as the
Contracting Authority, with
help of the
PPP Unit, judges capable of
carrying out the
Project as circumstances permit;
and
(c)
establish
evaluation criteria against
which proposals shall be
evaluated and ranked.
CHAPTER - VI
UNSOLICITED PROPOSALS
30.
Admissibility
of unsolicited proposals.—As an
exception to sections 16 to 27
of this Act, the Contracting Authority is authorized to
consider unsolicited proposals
pursuant to the
procedures set forth
in sections 31 to 33 of this Act, provided that such proposals do not
relate to a Project for which selection procedures have been initiated or
announced.
31.
Procedures for determining the admissibility of
unsolicited proposals.— (1)
Following receipt and preliminary examination of an unsolicited proposal, the
Contracting Authority shall promptly inform the proponent or investor whether
or not the Project is considered to be potentially in the public interest.
(2)
If the Project is considered to be potentially in the
public interest under sub-section
(1), the
contracting authority shall
invite the proponent to submit as much information on the proposed
Project as is feasible at this stage to enable the Contracting Authority to
make a proper evaluation of the proponent’s
qualifications and the
technical and economic
feasibility of the Project and to
determine whether the Project is likely to be successfully implemented in the
manner proposed in terms acceptable to the Contracting Authority. For this purpose, the proponent shall submit
a technical and economic feasibility study, an environmental impact study and
satisfactory information regarding the concept or technology contemplated in
the proposal.
(3)
In
considering an unsolicited
proposal, the Contracting Authority shall respect the
intellectual property, trade secrets or other exclusive rights contained in,
arising from or referred to in the proposal. Therefore, the Contracting
Authority shall not make use of information provided by or on behalf of the
proponent in connection with its unsolicited proposal other than for the evaluation
of that proposal, except with the consent of the proponent. Except as otherwise
agreed by the parties, the Contracting Authority shall,
if the proposal
is rejected, return
to the proponent the original and
any copies of documents that the proponent submitted and prepared throughout
the procedure.
32.
Unsolicited proposals that do not involve
intellectual property, trade secrets or
other exclusive rights.— (1) Except in the circumstances set forth in
section 28 of this Act, the Contracting Authority shall, if it decides to
implement the Project,
initiate a selection
procedure in accordance with
sections 16 to 27 of this Act, if the Contracting Authority considers that-
(a)
the envisaged output of the Project can be achieved
without the use of intellectual property, trade secrets or other exclusive
rights owned or possessed by the proponent; and
(b)
the
proposed concept or
technology is not
truly unique or new.
(2)
The proponent shall be invited to participate in the
selection proceedings initiated by the Contracting Authority pursuant to sub-
section(1) and may be given an incentive or a similar benefit in a manner
described by the Contracting Authority
in the
request for proposals in
consideration for the development and submission of the proposal.
33.
Unsolicited
proposals involving intellectual
property, trade secrets or other exclusive rights.—(1) If
the Contracting Authority determines that the conditions of clauses (a) and (b)
of sub-section (1) of section 32 of this Act, are not met, it shall not be
required to carry out a selection procedure pursuant to model provisions
contain in sections 6 to 17 of this Act. However, the Contracting Authority may
still seek to obtain elements of comparison for the unsolicited proposal in accordance with the provisions set out in
sub-section (2) to ( 4) of this section.
(2)
Where the Contracting Authority intends to obtain
elements of comparison for the unsolicited proposal, the Contracting Authority
shall publish a description of the essential output elements of the proposal
with an invitation for other interested parties to
submit proposals within
30 days.
(3)
If no proposals in response to an invitation issued
pursuant to sub-section (2) are received within 30 days, the Contracting
Authority may engage in negotiations with the original proponent.
(4)
If the Contracting Authority receives proposals in
response to an invitation issued pursuant to sub-section (2), the Contracting
Authority shall invite the proponents to negotiations in accordance with the
provisions set forth in
section 29 of
this Act. In
the event that
the Contracting Authority
receives a sufficiently large number of proposals, which appear prima facie to
meet its needs, the Contracting Authority shall request the submission of
proposals pursuant to sections 20 to 27 of this Act, subject to any incentive
or other benefit
that may be
given to the
person who submitted the
unsolicited proposal in accordance with sub- section (2) of section 32 of this
Act.
CHAPTER – VII
MISCELLANEOUS
PROVISIONS
34.
Confidentiality.— The Contracting
Authority shall treat proposals in such a manner as to avoid the disclosure of
their content to competing bidders. Any discussions, communications and
negotiations between the Contracting Authority and a bidder pursuant to sub-
section (3) of section
20 and sections 27, 28, 29 or
sub-section (3) and (4) of section 33 of this Act, shall be confidential.
Unless required by law or by a court order or permitted by the request for
proposals, no party to the negotiations shall disclose to any other person any
technical, price or other information in relation to discussions,
communications and negotiations pursuant to the afore- mentioned provisions
without the consent of the other party.
35.
Notice
of contract award.—
Except for Concession Contracts awarded pursuant to
clause (c) of section 28 of this Act, the Contracting Authority shall cause a
notice of the contract award to be published in official Gazette. The notice
shall identify the Concessionaire and include a summary of the essential terms
of the Concession Contract.
36.
Record of selection and award proceedings.— The
Contracting Authority shall keep an appropriate record of information pertaining
to the selection and award proceedings in accordance with the Khyber
Pakhtunkhwa Public Procurement
Rules and the
Khyber Pakhtunkhwa Right to
Information Ordinance, 2013.
37.
Review procedures.— (1) A bidder that
claims to have suffered, or that may suffer, loss or injury due to a breach of
a duty imposed on the Contracting Authority may seek review of the Contracting
Authority’s acts or failures to act through a Review Petition filed within
fifteen days of such grievance before the PPP Unit.
(2)
The PPP Unit, shall within thirty day of the receipt of
Review Petition, convene a hearing, affording an opportunity of being heard
both to the bidder and
the Contracting Authority,
record statements, receive evidence and other relevant material,
and decide the matter accordingly.
(3)
Subject to a further right of appeal under sub-section
(4), the decision of the PPP Unit shall be binding on the parties.
(4)
Any party, aggrieved
of the decision
of PPP Unit,
may institute an appeal to the Committee within fifteen days of the date
of decision aggrieved of. The Committee may, in its next meeting to be held
after receipt of the Appeal, pass a final order on the matter of complaint of
the bidder.
CHAPTER - VIII CONTENTS
AND
IMPLEMENTATION OF THE
CONCESSION CONTRACT
38.
Contents and implementation of the Concession
Contract.—The Concession Contract shall provide for such matters as the
parties deem appropriate, such as:
(a)
the nature and scope of works to be performed and
services to be provided by the Concessionaire;
(b)
the conditions for provision of those services and the
extent of exclusivity, if any, of the Concessionaire’s rights under the
Concession Contract;
(c)
the
assistance that the
Contracting Authority may provide to the Concessionaire in
obtaining licenses and permits to the extent necessary for the implementation
of the infrastructure Project;
(d)
any requirements relating to the establishment and
minimum capital of a legal entity incorporated in accordance with section 40 of
this Act;
(e)
the ownership of assets related to the Project and the
obligations of the parties, as appropriate, concerning the acquisition of
the Project site and any necessary easements, in accordance with sections 41 to
43;
(f)
the
remuneration of the
Concessionaire, whether
consisting of tariffs or user fee of the facility or the provision of services
the methods and formulas for the establishment or adjustment of any such
tariffs or fees and payments, if any, that may be made by the Contracting
Authority or other Regulatory Agency;
(g)
procedures for the review and approval of engineering
designs, construction plans and specifications by the Contracting Authority,
and the procedures for testing and final inspection, approval and acceptance of
the infrastructure facility;
(h)
the extent of the Concessionaire’s obligations to
ensure, as appropriate, the modification of the service so as to meet the
actual demand for the service, its continuity and its provision
under essentially the
same conditions for all users;
(i)
the
Contracting Authority’s or
other Regulatory Agency’s right
to monitor the works
to be performed and services
to be provided by the Concessionaire and the conditions and extent to which the
Contracting Authority or a Regulatory Agency may order variations in respect of
the works and conditions
of service or
take such other reasonable actions as they may find appropriate to ensure that
the infrastructure facility is properly operated and the services are provided
in accordance with the applicable legal and contractual requirements;
(j)
the extent of the Concessionaire’s obligation to
provide the Contracting Authority or a Regulatory Agency, as appropriate, with
reports and other information on its operations;
(k)
mechanisms to
deal with additional costs and
other consequences that might result from any order issued by the
Contracting Authority or
another Regulatory Agency in
connection with clauses (h) and (i) above, including any compensation to
which the Concessionaire might
be entitled;
(l)
any rights of the Contracting Authority to review and
approve major contracts to be entered into by the Concessionaire, in particular
with the Concessionaire’s own shareholders or other affiliated persons;
(m)
guarantees
of performance to
be provided and insurance policies to
be maintained by
the Concessionaire in connection with the implementation of the
infrastructure Project;
(n)
remedies available in
the event of
default of either party;
(o)
the extent to which either party may be exempt from
liability for failure or
delay in complying with any
obligation under the Concession Contract owing to circumstances beyond its
reasonable control;
(p)
the duration of
the Concession Contract
and the rights and obligations of the parties upon its expiry or
termination;
(q)
the manner for calculating compensation pursuant to
section 57 of this Act;
(r)
the
governing law and
the mechanisms for
the settlement of disputes that may arise between the Contracting
Authority and the Concessionaire; and
(s)
the rights and obligations of the parties with respect
to confidential information in terms of section 34 of this Act.
39.
Governing
laws.—The Public Private
Partnership Concession Contracts
shall be governed by the laws of Pakistan and by such laws, as are applicable
in the Province of the Khyber Pakhtunkhwa, unless otherwise provided in the
Concession Contract.
40.
Organization of the Concessionaire.— The
Contracting Authority may require that
the successful bidder
to establish a
legal entity incorporated under
the company laws
of Pakistan, provided
that a statement to that effect
was made in the pre-selection documents or in the request for proposals, as
appropriate. Any requirement relating to the minimum capital of such a legal
entity and the procedures for obtaining the approval of the Contracting
Authority to its statute and by-laws and significant changes therein shall be
set forth in the Concession Contract consistent with the terms of the request
for proposals.
41.
Ownership of assets.— Without affecting the right Contracting
Authority to own the infrastructure at the end of the Concession in case of
termination or otherwise, the Concession Contract shall specify, as
appropriate, which assets are or shall be public property and which assets
are or
shall be the
private property of
the Concessionaire. The Concession Contract shall in particular
identify the assets belong
to the following categories:
(a)
assets, if any, that the Concessionaire is required to
return or transfer to the Contracting Authority or to another entity indicated
by the Contracting Authority in accordance with the terms of the Concession
Contract;
(b)
assets, if any,
that the Contracting Authority, at its option, may purchase from the
Concessionaire; and
(c)
assets, if any, that the Concessionaire may retain or
dispose of upon expiry
or termination of
the Concession Contract.
42.
Acquisition of rights related to the Project site.—
(1) The Contracting Authority or other Regulatory Agency under the terms of
the law and the
Concession Contract shall
make available to
the Concessionaire or, as appropriate,
shall assist the
Concessionaire in obtaining such
rights related to the Project site, including title thereto, as may be
necessary for the implementation of the Project.
(2)
Any compulsory acquisition of land that may be required
for the implementation of the Project shall be carried out in accordance with
the Land Acquisition Act, 1894(Act No. 1 of 1894).
43.
Easements.— (1) The
Contracting Authority or
any another Regulatory Agency,
on the request of the Contracting Authority, under the terms of the law and the
Concession Contract shall make available to the Concessionaire or, as
appropriate, shall assist the Concessionaire to enjoy the right to enter upon,
transit through or do work or fix installations upon property of third parties,
as appropriate and required for the implementation of the Project.
(2)
Notwithstanding anything contained in the Easements
Act, 1882 (Act No. V of 1882), any other easements and licenses that may be required for
the implementation of the Project
shall be deemed to have been created in favor of the Concessionaire from the
date of Concession Contract.
44.
Financial arrangements.—(1) The
Concessionaire shall have the right to charge, receive or collect tariffs or
user fees for the use of the facility or its
services in accordance
with the Concession
Contract, which shall provide for methods and formulas for
the establishment and adjustment of those
tariffs or fees
in accordance with
the rules established
by the competent Regulatory
Agency.
(2)
The Contracting
Authority shall have
the power to
make direct payments to the Concessionaire as a substitute for, or in
addition to, tariffs or fees for the use of the facility or its services.
45.
Security interests.—(1) Subject
to any restriction
that may be contained in the Concession Contract, the Concessionaire has the right to create
security interests over any of its assets, rights or interests, including those
relating to the infrastructure Project, as required to secure any financing
needed for the Project, including, in particular, the following:
(a)
security over movable or immovable property owned
by the
Concessionaire or its
interests in Project assets; and
(b)
a pledge of the proceeds of, and receivables owed to
the Concessionaire for, the use of the facility or the services it provides.
(2)
The shareholders of the Concessionaire shall have the
right to pledge or create any other security interest in their shares in the
Concessionaire.
(3)
No security under sub-section (1) may be created over
public property or other property, assets or rights needed for the provision of
a public service, where the creation of such security is prohibited by any law.
46.
Assignment of
the Concession Contract.—Except
as otherwise provided in section 45 of
this Act, the rights and obligations of the Concessionaire under the Concession
Contract may not be assigned to third parties without the consent of the
Contracting Authority or Government as the case may be. The Concession Contract
shall set forth the conditions under which the Contracting Authority shall give
its consent to an assignment of the rights and obligations of the
Concessionaire under the Concession Contract, including the acceptance by the
new Concessionaire of all obligations there-under and evidence of the new
Concessionaire’s technical and financial capability as necessary for providing
the service.
47.
Transfer of
controlling interest in Concessionaire.— Except as otherwise
provided in the Concession Contract, a controlling interest in the
Concessionaire may not be transferred to third parties without the consent of
the Contracting Authority. The Concession Contract shall set forth the
conditions under which
consent of the
Contracting Authority shall be given.
48.
Operation of infrastructure.—(1) The
Concession Contract shall set forth, as appropriate, the extent of the
Concessionaire’s obligations to ensure:
(a)
the
modification of the
service so as
to meet the demand for the service;
(b)
the continuity of the service;
(c)
the provision of the service under essentially the same
conditions for all users; and
(d)
the non-discriminatory access, as appropriate, of other
service providers to any public infrastructure network operated by the
Concessionaire.
(2)
The Concessionaire shall have the right to issue and
enforce procedures governing the use of the facility, subject to the approval
of the Contracting Authority and the appropriate Regulatory Agency.
49.
Compensation
for specific changes
in legislation.—The
Concession Contract shall set forth the extent to which the Concessionaire is
entitled to compensation in the event that the cost of the Concessionaire’s
performance of the Concession Contract has substantially increased or that the
value that the Concessionaire receives for such performance has substantially
diminished, as compared with
the costs and
the value of performance originally foreseen, as a
result of changes in legislation or regulations
specifically applicable to
the infrastructure facility
or the services it provides.
50.
Revision of the Concession Contract.—(1)
Without prejudice to section 49 of this Act, the
Concession Contract shall further set forth the extent to
which the Concessionaire is entitled to
a revision of
the Concession Contract with a view to providing compensation in the
event that the cost
of the Concessionaire’s performance
of the Concession contract has
substantially increased or
that the value
that the Concessionaire receives
for such performance has substantially diminished, as compared
with the costs
and the value
of performance originally foreseen, as a result of:
(a)
changes in economic or financial conditions; or
(b)
changes in legislation or regulations not specifically
applicable to the infrastructure facility or the services it provides:
Provided that
the economic, financial,
legislative or regulatory
changes:
(a)
occur after the conclusion of the contract;
(b)
are beyond the control of the Concessionaire; and
(c)
are of such a nature that the Concessionaire could not
reasonably be expected
to have taken
them into account at the time the
Concession Contract was negotiated or to have avoided or overcome their consequences.
(2)
The
Concession Contract shall
establish procedures for revising the terms of the Concession
Contract following the occurrence of any such changes.
51.
Takeover of an infrastructure Project by the
Contracting Authority.— Notwithstanding
anything contained in the Concession Contract to the contrary, the Contracting
Authority shall have the right to temporarily
take over the
operation of the
facility for the
purpose of ensuring the effective
and uninterrupted delivery of the service in the event of serious failure by
the Concessionaire to perform its obligations and to rectify the breach within
a reasonable period of time after having
been given notice by the Contracting Authority to do so.
52.
Substitution of
the Concessionaire.— The
Contracting Authority may agree with the entities extending financing for an
infrastructure Project and the Concessionaire to provide for the substitution
of the Concessionaire by a new entity or person appointed to perform under the
existing Concession
contract upon serious
breach by the Concessionaire or other events that
could otherwise justify the termination of the Concession Contract or other
similar circumstances.
CHAPTER - IX DURATIO
N,
EXTENSION AND
TERMINATION
OF THE CONCESSION CONTRACT
53.
Duration
and extension of
the Concession Contract.— The duration of the Concession Contract
shall not be more than 30 years, unless a different duration is set forth in
the Concession Contract for each project, subject to approval of the Committee.
The Contracting Authority shall not agree
to extend its
duration except as
a result of
the following circumstances:
(a)
delay in completion
or interruption of
operation due to circumstances beyond the reasonable control
of either party;
(b)
Project
suspension brought about
by acts of the
Contracting Authority or other public authorities;
(c)
increase in costs arising from requirements of the
Contracting Authority not originally foreseen in the Concession Contract, if the
Concessionaire would not be able to recover such costs without such extension;
or
(d)
any other reasons,
justifying such extension,
so approved by the Committee.
54.
Termination of the Concession Contract by the
Contracting Authority.—The
Contracting Authority may terminate the Concession Contract:
(a) in the event that it can no longer be
reasonably expected that the Concessionaire will be able or willing to perform
its obligations, owing to insolvency, serious breach or otherwise; without
limiting the generality of the foregoing, circumstances may include:
(i)
serious failure to provide services in accordance with
the statutory and contractual standards of quality, including disregard of
price control measures;
(ii)
non-excusable
suspension or interruption of
the provision of the service without prior consent from the Contracting
Authority;
(iii)
serious failure by the Concessionaire to maintain the
facility, its equipment and appurtenances in accordance with the agreed
standards of quality or non-excusable delay in carrying out maintenance works
in accordance with the agreed plans, schedules and timetables; and
(iv)
failure to comply with sanctions imposed by the
Contracting Authority or the Regulatory Agency, as appropriate, for
infringements of the Concessionaire’s duties; and
(b) for compelling reasons of public
interest, subject to payment of compensation to the Concessionaire, the terms
of the compensation to be as agreed in the Concession Contract.
55.
Termination of the Concession Contract by the
Concessionaire.— (1) The
Concessionaire may not terminate the Concession Contract except under
the following circumstances:
(a)
in the event of serious breach by the Contracting
Authority or other Regulatory Agency of its obligations in connection with the
Concession Contract;
(b)
if the conditions for a
revision of the
Concession contract under sub-section (1) of section 50 of this Act, are
met, but the parties have failed to agree on a revision of the Concession
Contract; or
(c)
if the cost
of the Concessionaire’s performance
of the Concession Contract has
substantially increased or the value that the Concessionaire receives for such
performance has substantially diminished as a result of acts or omissions of
the Contracting Authority or other public authorities, for instance, pursuant
to clauses (h) and (i) of section 38 of this Act, and the parties have failed
to agree on a revision of the Concession Contract.
(2)
Before invoking termination under sub-section (1), the
Concessionaire shall approach the PPP Unit in review proceedings, as envisaged
under section 37 of this Act.
56.
Termination of the Concession Contract by either
party.— Either party shall have the right to terminate the Concession
Contract in the event that the performance of its obligations is rendered
impossible by circumstances beyond either party’s reasonable control. The
parties shall also have the
right to terminate
the Concession Contract
by mutual consent.
57.
Compensation upon termination of the Concession
Contract.— The Concession Contract shall stipulate how compensation due
to either party is calculated in the event of termination of the Concession
Contract, providing, where appropriate, for compensation for the fair value of
works performed under the Concession Contract, costs incurred or losses
sustained by either party.
58.
Wind-up and transfer measures.—(1) Upon
completion of the duration of Concession Contract, the infrastructure Project
shall vest free of all encumbrances, in the Contracting Authority.
(2)
Without prejudice to the foregoing, the Concession Contract shall provide, as
appropriate, for:
(a)
mechanisms and procedures for the transfer of assets to
the Contracting Authority;
(b)
the compensation to which the Concessionaire may be
entitled in respect of assets transferred during the currency of
the Concession, to
the Contracting Authority or to
a new Concessionaire or purchased by the Contracting Authority;
(c)
the transfer of technology required for the operation
of the facility;
(d)
the training of the Contracting Authority’s personnel
or of a successor Concessionaire in the operation and maintenance of the
facility; and
(e)
the
provision, by the
Concessionaire, of continuing support services and resources,
including the supply of spare parts, if required, for a reasonable period after
the transfer of the facility to the Contracting Authority or to a successor
Concessionaire.
CHAPTER - X
SETTLEMENT OF DISPUTES
59.
Disputes between
the Contracting
Authority and the
Concessionaire.—(1) If a dispute arises
out of or relates to the Concession Contract, or the breach thereof, and if
that dispute cannot be settled through direct discussions, the parties
shall first endeavor to settle the
dispute in an amicable manner by mediation administered by an independent
and impartial person appointed
by the Committee,
before resorting to arbitration. Thereafter, any unresolved
controversy or claim arising out of or relating to the Concession Contract, or
breach thereof, shall be settled by arbitration in the city of Peshawar or any
other place in Pakistan or as agreed to by the parties specified in the
Concession Contract. Judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof.
(2)
Notwithstanding anything contained in section 39 of
this Act, the applicable law for determination of disputes shall be decided by
the terms of the Concession Contract, in so far as it is not in repugnance to
the laws of Pakistan.
60.
Disputes involving customers or users of the
infrastructure facility.— Subject to overall control and
supervision of the Committee and the concerned Regulatory Agency, where the
Concessionaire provides services to the public or operates infrastructure
facilities accessible to the public, the Contracting Authority may require the
Concessionaire to establish simplified
and efficient mechanisms for handling claims submitted by
its customers or users of the infrastructure facility.
61.
Other disputes.—(1) The Concessionaire and
its shareholders shall be free to choose the appropriate mechanisms for
settling disputes among themselves.
(2)
The Concessionaire shall be free to agree on the appropriate
mechanisms for settling disputes between itself and its lenders, contractors,
suppliers and other business partners.
CHAPTER - XI
INCIDENTAL PROVISION
62.
Viability Gap
Fund.–The Government may establish a Viability Gap
Fund to support Public-Private Partnership Projects
and finance the gap between Project revenues constrained by affordability
considerations and revenues needed to generate a fair return on investment for
the Public- Private Partnership Projects.
63.
User fee.--(1) Government may impose and
revise, through a notification in the official Gazette, single or multiple user
fees for different uses of the infrastructure Projects undertaken in
public-private partnership mode by different classes of the users.
(2)
Government may exempt,
through notification in
the official Gazette, certain classes of users from payment of the user
fees.
(3)
Government may entrust the Concessionaire with
collection of user fees.
(4)
Government shall set the user fees at levels that ensure
the financial viability of the Project and fully cover the operations and
maintenance expenses, plus a fair return to the Concessionaire. Notwithstanding
the foregoing, if the Government elects to maintain the user fees at levels
below that would ensure financial viability as described herein, then
it shall compensate
the Concessionaire for
the difference through the
Viability Gap Fund.
64.
Reports
and audits.-The Contracting
Authority shall include appropriate reporting and audit requirements
in the Concession Contracts, taking into consideration the nature of the
Project, its business structure, the source of financing and the financial
commitments of Government to the Concessionaire. To the
extent required, the
Contracting Authority may retain outside consultants and auditors to
perform periodic reviews of the Concessionaire’s accounts which may include the
same reports submitted by the Concessionaire to its lenders.
65.
Public
disclosure.–(1)
Subject to the
confidentiality provision
contained in section 34 of this Act, a Concession Contract or any other
ancillary or additional agreement shall be a public document.
(2)
The
Contracting Authority shall
make arrangements for inspection or copying a Concession Contract
or any other ancillary or additional agreement subject to the payment of the
prescribed fee.
(3)
Any person may, subject to the payment of prescribed
fee and any other reasonable restriction, inspect or obtain copies of a
Concession Contract or any other ancillary or additional agreement.
66.
Prescribing and enforcing standards.– Government, in consultation with the
Committee may–
(a)
prescribe and enforce performance standards for a
Project including standards of performance of the Concessionaire in regard to
the services to be rendered by it to the consumers;
(b)
prescribe quality standards including standards of
materials, equipments and other resources or processes relevant to
infrastructure Projects including planning criteria, construction practices and
standards of such facilities, operating standards and maintenance schedules for
regulating the working of the Concessionaire to ensure efficiency and adherence
to the prescribed quality standards;
(c)
prescribe the mode of output-based contracting,
performance- based payment systems and
output-based procurement
procedures;
(d)
establish a uniform system of accounts to be followed
by the Concessionaires;
(e)
take steps to promote effective competition and
efficiency in
Projects using
the Public Private Partnership approach;
(f)
prescribe
the mode of
conducting public hearing
and consultation with stakeholders; and
(g)
prescribe any other standard for regulating the
infrastructure development through Public Private Partnership.
67.
Indemnity
by the Concessionaire.–The Concessionaire shall indemnify Government and the relevant
Contracting Authority against any defect in design, construction, maintenance
or operation of the Project and undertake to reimburse all costs, charges,
expenses, losses and damages suffered by
Government, Contracting Authority or an end user due to any such defect.
68.
Recovery
of costs, dues
and fees.–(1) Regulatory
Agency may recover a sum
due from the
Concessionaire, as ascertained
through the dispute resolution under this Act, as if the same is recoverable as
arrears of land revenue under the West Pakistan Land Revenue Act, 1967 (West
Pakistan Act No. XVII of 1967).
(2)
Regulatory Agency shall designate an officer as
collector to exercise the powers of collector under the West Pakistan
Land-Revenue Act
1967 (West
Pakistan Act No. XVII of 1967).
69.
Protection of action taken in good faith.–
No suit, claim or other legal proceedings shall lie against the Committee or
the PPP Unit, a Contracting
authority or a
representative of the
Committee or the Contracting Authority in respect of
anything done or intended to be done in good faith under this Act or the rules
or regulations made thereunder.
70.
Overriding
effect.---The provisions of this Act shall have effect notwithstanding
anything contained in any other law for the time being in force.
71.
Power to make rules.– Government may, make
rules for carrying out the purposes of this Act.
72.
Power to frame regulations and guidelines.–
Subject to this Act and the rules made hereunder, the Committee may approve
regulations, procedures and guidelines to make operations under this Act,
efficient, transparent and effective.
SCHEDULE
[SEE SECTION 9]
INFRASTRUCTURE
AND DEVELOPMENT SECTO RS
(1)
Power generation facilities.
(2)
Education facilities.
(3)
Health facilities.
(4)
Housing.
(5)
Industrial estates.
(6)
Information technology.
(7)
Land reclamation.
(8)
Canals or dams.
(9)
Roads (provincial highways, district roads, bridges or
bypasses).
(10)
Sewerage or drainage.
(11)
Solid waste management.
(12)
Sports or recreational infrastructure, public gardens
or parks.
(13)
Trade fairs, conventions, exhibitions or cultural
centers.
(14)
Urban transport including mass transit or bus terminals.
(15)
Water supply or sanitation, treatment or distribution.
(16)
Wholesale markets, warehouses, slaughter houses or cold
storages.
(17)
Up, middle and downstream Oil and Gas Projects.
(18)
Dimension stones and mineral, mining and value
addition.
(19)
Power transmission and distribution facilities.
(20) Training institutes and common
facilitation and training centers.
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